The crypto coin is known for its volatility, high transaction fees and social media hype.
SafeMoon is a relative newcomer to the cryptocurrency market, known for its tremendous volatility, high transaction fees of 10% and social media hype. SafeMoon, like better-known crypto coins like Bitcoin and Ethereum blockchain’s Ether, is based on distributed ledger technology and was created in March 2021 on the Binance Smart Chain blockchain.
SafeMoon’s creators say it was designed with the intention of encouraging long-term investment. Half of the 10% charged during transactions is shared among long-term holders, and the other to a liquidity pool that is intended to stabilize the price of SafeMoon, in contrast to Dogecoin, Shiba Inu Coin and a number of other cryptocurrency that seemed on the surface to be either a joke or bogus. But just like Akita Inu, Dogelon and other much smaller crypto breeds, SafeMoon appeared to be trying to cash in on Dogecoin’s popularity by investing in meme culture.
Because the fee for buying into SafeMoon goes back to its earlier investors, SafeMoon has been regarded by some — including one SafeMoon investor — as a “Ponzi” scheme — an allegation that SafeMoon’s CEO emphatically denies.
The project’s founders say they designed SafeMoon for long-term investment, and the 10% transaction fee is set intentionally high to discourage people from selling the coin and encourage long-term HODLers.
SafeMoon is considered to be among the riskier investments in the crypto world. Like Shiba Inu, Safemoon has no particular use and derives its value solely from other investors buying in — which is why some have called SafeMoon a “shitcoin.”
Still interested in SafeMoon? This Forkast.News explainer will help you learn more.
What is SafeMoon — and why is it famous?
SafeMoon is a cryptocurrency token that was launched under BEP-20 tokens on the Binance Smart Chain (BSC) blockchain. In the blockchain ecosystem, there are decentralized finance (DeFi) platforms and centralized finance (CeFi) platforms. The DeFi ecosystem is not regulated by a central bank but the assets show publicly on the blockchain network while in the CeFi eco-system, assets are being handled through an intermediate exchange. The BSC blockchain incorporates SafeMoon to run in a CeFi ecosystem.
During the second quarter of this year, the price of SafeMoon doubled following the endorsement from celebrities such as rapper Lil Yachty, UFC boxer Jake Paul and popular sports blogger Dave Portnoy.
By market capitalization, SafeMoon is currently ranked 91st largest of all cryptocurrency, according to CoinGecko, while CoinMarketCap currently ranks SafeMoon as the 207th most popular out of all crypto, as of publishing time.
But both CoinMarketCap and CoinGecko agree that SafeMoon’s current price is more than 70% lower than its all-time high earlier this year. CoinGecko says SafeMoon’s all-time high happened on May 11, while CoinMarketCap reports SafeMoon’s price peak as occurring on April 20 this year. (To find out why these two leading cryptocurrency ranking sites sometimes report wildly different dates and numbers, please see this Forkast.News explainer on crypto economics.)
History Of SafeMoon
SafeMoon is one of the crypto token standards designed to extend to Ethereum standards on the cryptocurrency ecosystem. SafeMoon was developed by six developers and launched on the BSC blockchain on March 8, 2021. The name was derived from a phrase “Safely To The Moon” which implies that the intention of the coin is not to rise only but to rise safely. Since inception, the coin now has more than 2.9 million holders, according to BscScan.
Core features of SafeMoon
- Reflection: The white paper of the project reports that SafeMoon holders are charged a transaction fee of about 5%, which is distributed among the holders of the coin.
- LP acquisition: The white paper also revealed that this second core component of the project charges transaction fees of about 5%, which will be issued to various liquidity pools on PancakeSwap and other platforms.
- Token burn: The project’s white paper also showcased that every transaction that occurs on the mainnet is taxed 10%. The idea is that 5% of the tax will be as reflection rewards while the other 5% goes to the liquidity pools. Half of the 5% that goes to the liquidity pools are converted into Binance Coin (BNB) in order to guarantee the liquidity of the SafeMoon and Binance coin pair.
How does SafeMoon work?
Since its launch on March 8, 2021, SafeMoon has accumulated a market capitalization of about US$1.9 billion while Bitcoin has a market cap of about US$1.1 trillion.
Traders are compelled to pay a 10% charge, with half of the money going to SafeMoon’s current holders and the other half going to a liquidity pool (in an effort to better maintain price stability).
SafeMoon’s creators also decrease the quantity of SafeMoon in circulation.
What are the main criticisms of SafeMoon?
SafeMoon, like many cryptocurrency coins, is a highly speculative asset with no inherent value. Here are a few other risks to think about.
Volatility: SafeMoon’s price has been highly erratic since its launch, increasing more than 20,000% before plummeting more than 70%. Because cryptocurrency coins have no intrinsic worth, your profit depends on what you paid and how much you can sell it for.
Regulation: Cryptocurrency coins are very new, and governments are just now learning about them and their potential effect. Crypto trading has been banned by China owing to the financial dangers they represent and the speculative trading they encourage. Higher tax rates on crypto profits may potentially be a form of regulation.
Liquidity: For traders wanting to get in or out of SafeMoon fast, the fact that they discourage selling via the 10% charge may make liquidity a problem. SafeMoon is traded on Binance and PancakeSwap, platforms that enable several cryptocurrency coins to be traded.
Bottom line: Because of the centralized nature of proof of authority, SafeMoon, like all other tokens on BSC, is essentially at the discretion of Binance. If Satoshi Nakamoto reappeared and had direct access to Bitcoin’s code, he could change it and have it implemented by every miner and node in the network, the network would no longer be decentralized, lowering trust in the system.
All ships, however, tend to rise with the tide. If Bitcoin continues to rise in this bull market, there’s a possibility SafeMoon will rise as well, and other speculative investors may drive it even higher.
What does the future hold for SafeMoon?
A roadmap of the SafeMoon team’s goals for the upcoming year, on the SafeMoon website, is currently blank.
A message on SafeMoon’s roadmap page says:
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