Reddit is melting down. But there's at least one reason to applaud interim Reddit CEO Ellen Pao and her staff. They realize just how much damage they've done on the site often called "the front page of the Internet."

Over the holiday weekend, volunteer moderators shut down nearly 300 of the site's top discussion boards—called subreddits—after Pao and company abruptly fired the site's director of talent, Victoria Taylor. And on Monday, Pao took to Reddit to apologize for the way things were handled. But she didn't stop at apologizing for the Taylor incident. She apologized for years of mismanagement.

"We screwed up," she wrote. "Not just on July 2, but also over the past several years. We haven't communicated well, and we have surprised moderators and the community with big changes."

Indeed, the problem is far bigger than this one weekend. The July revolt shines a harsh light on the gap between the company managers and the band of volunteers who really keep the site going, dealing directly with users and keeping things from getting out of hand. If that gap grows any wider, it could destroy Reddit as we know it.

"These are people that are contributing blood, sweat and tears to the service, and they’re doing it for free," Gina Bianchini, the one-time CEO of Ning, a social networking platform that attracted 90 million people across 300,000 active communities, says of Reddit's volunteer moderators.

The good news is that Pao and other leaders are now working overtime to shrink the gap. But in some ways, the very nature of Reddit is working against them. "It was hard to communicate on the site, because my comments were being downvoted," Pao wrote at one point in response to a user criticizing the company’s handling of Taylor’s dismissal. "I did comment here and was communicating on a private subreddit. I'm here now."

That pretty much describes her predicament, and the predicament of anyone who wants to turn a community-driven site into a corporate money maker. Wikipedia has flirted with these same problems over the years. But it has avoided the big meltdown, in large part because Wikimedia Foundation, a nonprofit, operates Wikipedia as a "free knowledge project"—and because it isn't geared towards the expression of strong opinions and sentiments. Reddit is different. WIRED's parent company, Advance Publications, is one of the many that owns a stake in the company. And, many times, outrage is par for the course.

The Taylor Problem

Victoria Taylor, who ran a wildly popular Q&A forum with celebrities called Ask Me Anything, was a main liaison for many of the moderators, who manage the site's nearly 10,000 discussion boards and enforce its rules. Taylor's termination was especially hard on the moderators of Ask Me Anything, who had no particular plan in place to manage upcoming events.

By Sunday, according to Reddit, most of the hundreds of subreddits that had closed were back online. But discussion of the controversy continued apace—and then some. The anger towards Pao and the rest of the braintrust was enormous.

Many Redditors have launched personal attacks against Ellen Pao, calling the dismissal of Taylor hypocritical after Pao herself endured and lost a high-profile sex discrimination trial against her former employer, venture capital firm Kleiner Perkins Caufield & Byers. As of Tuesday morning, a public petition on social-justice platform Change.org demanding Pao’s resignation garnered close to 200,000 signatures.

Now the Reddit braintrust, including Pao, are actively reaching out to the site's members to address what they've described as a history of mistakes and poor communication. But they have an awfully long way to go.

The Community Conundrum

Part of their problem is that although Reddit was originally intended as a venue where the ideals of free speech and the wisdom of the crowd would reign, the crowd often turns into a mob. Reddit has played central roles in such unflattering incidents as the amateur movement to unmask the Boston Marathon bomber in 2013, and the celebrity photo hack and Gamergate controversies of 2014.

In Reddit’s own survey of thousands of its users, the company found that the top reason Redditors wouldn’t recommend the site to their friends was the danger of exposing them to "hateful community and content." Others have accused Reddit of morphing into a venue where a kind of "hive mind" rules, the platform's devotion to self-regulation too easily gamed by players seeking to quell voices with a dissenting point of view.

Which is not to say Reddit doesn't have some of the best qualities seen in an online community—and indeed, the Internet itself. Redditors are some of the most adept at engaging in entertaining conversation around certain subjects, like gaming or television shows, and many of its users applaud the variety, volume, freshness and quality of the content on the site. "I can find anything there!" wrote one user. "Sometimes it even surprises me. I have a great laugh, see interesting topic, information or discussion every day and if anything happens, it's on Reddit first."

But the nature of unfettered discussion also puts the site's leadership in a difficult position. This is a community site. But how much should they seek to moderate that community? Users have expressed dissatisfaction at recent changes by the company, which last month adopted a new policy against harassment and shuttered five subreddits in an effort to exile the trolls on the site. Some critics said the closing down of some offensive subreddits while letting others remain open was selective, tantamount to a kind of censoring.

In other words, all those volunteer moderators are hugely important to the site's well being, especially those whose work reflects the site at its best rather than its worst. And now Reddit has alienated them as well.

The Solutions

At least the braintrust appears to be making moves to meet the needs of the moderators. On Monday, Pao outlined the company’s plans for improving the Reddit community, including prioritizing the development of new tools for moderators and the appointment of Kristine Fasnacht (u/krispykrackers) to a new role called Moderator Advocate—a kind of mediator position between moderators and administrators.

"We’re also going to figure out the best way for more administrators, including myself, to talk more often with the whole community," Pao wrote. "We understand that the community is the most important thing here. Because the moderators don't have tools they need to do their work, it's having a negative impact on the community."

Though there was no official word on how the improvements to Reddit would concretely look like, one engineer tasked with working with moderators to come up with solutions, u/weffrey, mentioned some possibilities in a post, including a pseudo-anonymous feature (“kinda like how Google does ‘fancy fox’ or ‘curious cat’ when you share a document,” the engineer explained), removal reasons, and an option to show reports when something is removed, among others.

The moderators of the Ask Me Anything, meanwhile, said they had been working with Reddit co-founder Alexis Ohanian over the weekend to institute new protocols for how Reddit would host its celebrity Q&As. (Ohanian, incidentally, also took responsibility for the firing of Taylor, and apologized for how he communicated the change to the AMA team.) Though the mods previously stated they had "unfortunately come to the conclusion that [Reddit does] not have a plan that we can put our trust in," the latest news appears to at least be a step towards a possible compromise. Reached by email, the moderators of /r/IAmA declined to comment for this story.

Beyond Damage Control

The result of these initiatives will go a long way towards deciding the future of the company. Reddit recently announced it would launch an original video project, and it has alluded to an expansion of its nascent advertising business. Though the company, according to its lawyers, is valued internally at $250 million, Reddit reported its 2014 ad revenue to be a modest $8.3 million, a number that could conceivably be improved on as the 10th most-trafficked website in the U.S., according to Internet analytics outfit Alexa.

For Bianchini, the onus is firmly on Pao and Reddit’s other managers to close the gap and reach out to the site’s massive 164 million monthly active users with more visibility. “Platforms like Reddit feel more like a democracy than other companies, where administrators have the luxury of treating it more like a private endeavor," she says. "If anything, the Reddit community needs leaders who are even more open, engaged and visible.”