@megadrive I'm in favour of your proposal, as it's decentralized and involves community participation.
If I could suggest a modification it would be to make the moderator role time limited, perhaps the stake weighted vote decays, or requires a fresh round of voting every X days or X months. This ensures only active moderators are in the role, as voted by active community members. As we see from witness voting, votes can remain in place for years, even after those accounts have long been inactive.
Regarding author and curator loosing rewards on bad posts, I would be in favour of rewards being removed for both.
The Diversity Index is really cool, I would also be in favour of that proposal.
Yes good idea but may not be easy to code in the first draft, the decay may have to come in a future HF and might as well add it to witnesses as well.