The safe moon is a new cryptocurrency in the crypto world and it created hype among crypto investors when its price tripled in the past month. Released in March 2021, this cryptocurrency is being hyped as a “Get Rich Real Quick”-opportunity by the crypto community. So, you might be planning to buy some Safemoon coins to not miss out on the next big thing. But before you do, you should read this article to find out whether Safemoon is legit and whether would it be a good decision to invest in this cryptocurrency. Let’s explore the information!
- Binance Smart Chain is a centralized finance (CeFi) ecosystem and it is also a competitor of Ethereum’s decentralized finance (DeFi) ecosystem
- According to the Safemoon official website, this crypto coin has three core components: reflection, fee, token burn
- Safemoon was launched with a huge supply of 777 trillion tokens and a very low price
- If you want to sell Safemoon then you have to pay a fee of 10%
- Safe moon is extreme volatility and it hugely lacks liquidity
What Is Safemoon?
SafeMoon is an altcoin which is also known as a BEP-20 token and it is a fairly new, highly volatile cryptocurrency. This coin was launched on March 8, 2021, on the Binance Smart Chain ecosystem. Binance Smart Chain is a centralized finance (CeFi) ecosystem and it is also a competitor of Ethereum’s decentralized finance (DeFi) ecosystem. Since the release, it has gained huge popularity and added nearly 2.5 million users to its protocol. In this short period, Safemoon has burned over 40% of the total token supply.
According to the Safemoon official website, this crypto coin has three core components. The first component is reflection. This is where Safemoon charges a fee for each transaction and then distributes it among holders of the Safemoon token. The second component is a fee that is charged on transactions that will be given to various liquidity pools on Pancake Swap and other platforms. The third component is a token burn that occurs on each trade. In the SafeMoon whitepaper, they said –
“Having burns controlled by the team and promoted based on achievements helps to keep the community rewarded and informed. SafeMoon aims to implement a burn strategy that is beneficial and rewarding for those engaged for the long term. Furthermore, the total number of SAFEMOON burned is featured on our readout located on the website”
Currently, Safemoon ranks 202 on coinmarketcap with a market capitalization of $2.9 billion and a circulating supply of 585 trillion tokens. The total supply of SafeMoon is one quadrillion tokens.
Key Information Of Safemoon
1. Safemoon was launched with a huge supply of 777 trillion tokens and a very low price. The release price was $0.0000000010. So, if you bought $100 worth of Safemoon back then you would have received 100 billion Safemoon!
2. If you want to sell Safemoon then you have to pay a fee of 10%. Usually, the fee is distributed between owners of Safemoon and a liquidity pool with Safemoon and Binance Coin (BNB)
3. Manual Burn is a key feature of Safemoon. It means the Safemoon developers will regularly burn tokens and reduce the supply to increase the price
4. According to many crypto experts, Safemoon doesn’t have a real-world purpose or competitive advantage; therefore, Safemoon is not for long-term success
5. The top crypto exchanges don’t support Safemoon therefore you won’t be able to purchase Safemoon with cash or through the biggest crypto exchanges
6. Since the release, Safemoon has received quite a bit of criticism and it was referred to as a Ponzi scheme and the Safemoon community was compared to a cult
Pros And Cons Of Buying SafeMoon
If you are willing to invest in Safemoon then take a look at some of the pros and cons of investing in Safemoon.
Pros Of Buying Safemoon
1. Valuable Meme Crypto Brand
There are more than 13,000 cryptocurrencies out there and it is very difficult to highlight a new cryptocurrency. So, the best part of Safemoon is its branding. To stand out in the crowd, Safemoon has generated cult-like social media followings and therefore, Safemoon’s name has spread like wildfire thanks to various viral memes. Since its release, Safemoon has been trending on social media. Safe moon doesn’t have a significant technological advantage over popular coins like Bitcoin, Ethereum, etc. so it has to rely mostly on the strength of its branding.
2. Passive Income
If you are looking for some investment to generate passive income then Safemoon will be a good option because it is designed to incentivize long-term investing and punish selling. If you want to sell your SafeMoon then you have to pay a fee of 10%. Half of the transaction fee is distributed among the Safemoon holders so it could be a great source of passive income for you. So, if the number of Safemoon sells increases then the Safemoon investors will generate more passive income as a reward for holding.
3. High-profile Influencers
With a lack of technological advantages, Safemoon has made itself stand out in the growing crowd of altcoins thanks to the endorsements from high-profile online influencers. Recently, Dave Portnoy, founder of Barstool Sports announced a $40,000 investment in SafeMoon which increased the price of Safemoon and created a great hype among the crypto investors.
Cons Of Buying Safemoon
1. Illiquidity And Volatility
Like any other Altcoin, illiquidity and volatility are two main dangerous things about investing in SafeMoon. Safe moon is extreme volatility and it hugely lacks liquidity. Therefore, the potential for high trading SafeMoon to crash as hard as it has skyrocketed is very high. Moreover, Safemoon charges a fee for each transaction and it is not available in popular and leading exchanges therefore the SafeMoon market is far less liquid than other popular cryptocurrencies. Currently, the only way to buy Safemoon is by using Binance’s PancakeSwap decentralized exchange.
2. No Utility Or Real-World Use Of SafeMoon
Another very important disadvantage of the Safemoon coin is its utility or real-world use. There are hardly any major vendors that accept SafeMoon as a payment method. Moreover, as Safemoon doesn’t trade on popular crypto exchanges, it become even more difficult to trade Safemoon for fiat currencies or other cryptocurrencies. Moreover, Safemoon doesn’t have a technological advantage over other cryptos; so, in this current state SafeMoon has little or no real-world utility.
3. Centralized Ownership
The centralized ownership of Safemoon has been the biggest concern of crypto experts. The CEO of Safemoon owns more than 50% of the coin’s liquidity which makes it a riskier altcoin to invest in 2022. Many crypto experts think that the outcome of Safemoon will be similar to Bitconnect, a notorious cryptocurrency that collapsed amid accusations of fraud. Though there is no proof that Safemoon is an outright fraud nut most altcoins are designed to help early investors get rich at the expense of new buyers!
Is Safemoon Legit?
Yes, Safemoon is a completely legit crypto token and with the current price trend, it would be a great option to invest money for massive gains over short periods. However, Safemoon is still very volatile, and just like the massive gains, there could be just as massive drops in price. So, you should be cautious about investing in Safemoon.
Finally, profit and losses are common for any type of investment. However, the ups and downs of SafeMoon’s price are truly excessive. Moreover, many crypto experts are calling Safemoon a Ponzi scheme because of its business model. However, it is still possible to earn money from Safemoon investment, you just have to understand what you are getting into!
Last Updated on October 30, 2022 by Magalie D.
Magalie D. is a Diploma holder in Public Administration & Management from McGill University of Canada. She shares management tips here in MGTBlog when she has nothing to do and gets some free time after working in a multinational company at Toronto.