But recently the irrational exuberance has been replaced with some hard hitting accusations and negative publicity that could point to Safemoon as being just a hyped-up scheme, and perhaps not something you should consider investing in.
Creating a huge buzz around a crypto-coin that could go ‘to the moon’ can sometimes overshadow the properties of crypto that give it its intrinsic value, such as security and efficiency.
Expensive marketing campaigns can also take up a large chunk of that coin’s pool of capital, leaving less money available for the paying of skilled developers to create a stable and worthwhile end product.
What Sort of Coin is Safemoon?
Safemoon is considered a decentralized finance token, and is built on the Binance Smart Chain network. What sets Safemoon apart from other coins and tokens is the way it incentivises holding onto your tokens, and discourages selling.
When someone decides to sell their tokens, they are subject to a lofty 10% fee. According to the Safemoon whitepaper, half of that fee is redistributed among remaining Safemoon holders, while the other half is added to a pool of liquidity to help counteract sell pressure and provide a price floor.
The most updated version of the token, Safemoon V2, has a whopping total supply of 1,000,000,000,000 tokens. A trillion! Of those trillion, about 580 billion tokens are currently in circulation.
Given the low price per token of approximately $0.0001783 USD at the time of this article’s creation, you don’t need to invest a large amount of cash to acquire a very high number of tokens. While it is a novelty to own millions or billions of an asset, potential investors should approach Safemoon with a great deal of caution and diligence.
Unlike many tokens being developed on the Ethereum blockchain, the Safemoon token has no real utility in terms of a practical use, beyond an attempt to make profit if the price of the coin appreciates.
Critics of the coin have compared it to a Ponzi scheme, and it’s hard to ignore the glaring similarities. Because the value of Safemoon relies on marketing, hype, and celebrity endorsement, there are no solid fundamentals for it to fall back on, creating a risky situation for buyers.
John Karony, the former analyst for the United States Department of Defense, is the CEO and founder of the SafeMoon token.
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Legal Action and Safemoon Coding Issues
Since the founding of Safemoon in 2021, it has faced numerous challenges, including multiple lawsuits and allegations of fraud. One class action lawsuit has been brought against Safemoon for misleading investors about its prospects for growth and its financial benefits.
A variety of well-known celebrities have promoted Safemoon on Twitter and other social media without disclosing that they were paid to do so, and have been named in a second class action lawsuit as well.
Although legal challenges and fraud allegations against crypto coins and companies is not an uncommon occurrence, traders and investors should be aware of these issues before making the decision to invest or even trade this asset in the short-term.
Aside from legal action, Safemoon has run into problems with the security of its product. In March of 2023, a hacker discovered a flaw in the smart contract and drained the liquidity pool of almost 9 million dollars in funds.
Although the attacker has come to an agreement with the project developers to return 80% of the funds, the incident is definitely a blow to the perceived safety and security of a token with the word ‘Safe’ right in the name.
Safemoon vs Bitcoin
In the vast sea of cryptocurrencies, there are a dizzying number of coins and tokens available to buy and sell. Despite this, Bitcoin remains the most dominant digital asset in the space and perhaps the most natural with which to compare other coins.
Obviously Bitcoin and Safemoon are vastly different when it comes to total supply and current price, but perhaps the most significant difference between the two assets is the level of centralization.
Since Safemoon is built on the Binance Smart Chain network, Binance retains control of who validates transactions in their network and thus has a higher level of centralization than Bitcoin, which has no central authority governing its development and operation.
The supply of Safemoon tokens that is not in circulation remains relatively high and is in the hands of the projects’ developers, adding another source of uncertainty and risk to the equation.
If a decision is made to sell these tokens on the open market, issues with lack of liquidity and enormous sell pressure could ensue, driving the token price even lower than where it currently sits.
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New Developments for Safemoon
Safemoon has released its own wallet for digital assets and currently has plans to develop its own crypto exchange. Users can also join a waiting list on the company’s website to acquire a Safemoon Card, which allows holders to carry out everyday transactions using assets from their Safemoon Wallet.
The card automatically exchanges cryptocurrency for FIAT and can therefore be used at retailers who do not accept crypto as a form of payment.
Other mentions of future development on the website include projects involving NFTs and a Safemoon Blockchain Testnet, but do not include a high level of detail and have no specific timelines disclosed.
Is Safemoon safe?
The safety of any crypto relies heavily on how well the network is developed and how flawlessly the code is written. A hacker has previously exploited a flaw and exposed vulnerability in Safemoon’s programming.
These incidents have occurred throughout the crypto-space and emphasize the importance of code audits and having skilled developers on board.
How do I buy Safemoon?
Although Safemoon is not currently offered by Coinbase, it is available on various decentralized exchanges like Pancake Swap, and on more centralized exchanges like Bitlink and Crypto.com.
Is Safemoon a scam?
This question is largely still open for debate. While critics have compared Safemoon to a Ponzi scheme, and the developers have faced legal challenges, whether or not the token is an outright scam remains to be seen.
What is the difference between Safemoon V1 and V2?
Safemoon underwent an update for the purpose of accessibility and security. The new version consolidates the old tokens and lowers the total supply by a factor of 1000.
Who are Safemoon’s competitors?
While investors could potentially compare Safemoon to any digital asset, often Safemoon is grouped in with what are often referred to as MEME coins, such as Dogecoin or Shiba Inu.
How do I store Safemoon?
Because Safemoon is built on the Binance Smart Chain, the tokens must be stored in a wallet that is compatible with the BSC network. Many popular crypto wallets are appropriate for storing your Safemoon tokens.
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Final Thoughts on Safemoon
Investing and trading in cryptocurrency always carries a significant level of risk and potential reward. Safemoon’s reliance on marketing and its current lack of utility make price predictions for the future extremely difficult.
While there has been much criticism and litigation involved with the token, it still has loyal supporters who defend its value and continue to promote its ability to increase one’s wealth over time.
Even more mainstream cryptocurrencies like Ethereum have faced what seemed like insurmountable challenges in the past and they continue to chug along in their development and growth. While Safemoon may not necessarily survive and thrive, observers of the crypto space will watch Safemoon’s progress with great interest.
Going ‘to the moon’ might be what you wish for all your holdings. But don’t forget that sometimes the Earth gets in between you and the moon. Meaning ‘going to the moon’ actually means coming down towards the Earth.