Cryptocurrency or as millennials call it nowadays, Crypto is nothing but a virtual or digital form of money. This digital asset uses blockchain technology and is immensely secured by cryptography which makes it nearly impossible to double-spend or counterfeit, to say the least. Cryptocurrency is not an unfamiliar concept to people anymore, especially today when potential investors from all over the world are passionate about these digital assets. The inflation in prices and their sudden decline are evidence of the claim that the virtual currency market is very volatile and uncertain.
As of today, there are a lot of cryptocurrencies present in the crypto marketplace to choose and invest in including Dogecoin, Bitcoin, Baby Doge, and Ethereum which have been playing the role of eye grabbers in the industry. But, this doesn’t end here, the world of cryptocurrencies has its latest addition with another such currency known as SafeMoon. Although being a recent addition, the virtual currency is seeking the attention of investors from all around the world.
Everything to know about SafeMoon
Source: Investment U
Launched in March 2021, SafeMoon is the newest addition to the cryptocurrency industry. This virtual asset has a community-driven viewpoint to decentralized financial systems. The virtual currency sells itself as a DeFi token. Some of you might be wondering about the name SafeMoon. SafeMoon expands to the phrase Safely to the Moon, which originally came up with Dogecoin and now SafeMoon can be seen following the very same phrase. As previously discussed, SafeMoon is a decentralized finance token, which is the same as many other virtual currencies like Bitcoin and it aims to restore the issues faced in terms of price volatility, unlike many other cryptocurrencies.
SafeMoon, like many other currencies, exists on blockchains and is not seen leveraging any exchanges or financial institutions as its intermediaries. SafeMoon looks forward to promoting peer-to-peer exchange and it is vital for you to know that the original supply of the currency was nearly one quadrillion tokens at the beginning of this year according to the whitepaper released, but the developers of the project destroyed (burned) 223 trillion of those tokens, leaving the supply at the time of launch to be nearly 777 trillion tokens.
For those of you who don’t know, SafeMoon CEO, John Karony worked with the US department of defense as an All-Source analyst. Since the currency’s introduction to the market, it has experienced a steady increase in its market prices and as per CoinMarketCap, the digital asset has a market cap of nearly 2.2 billion US dollars and the currency price being 0.000003967 US dollars.
How does it work?
SafeMoon employs a protocol that refers to fixing the issue of price volatility by discouraging day trading of their coins. The virtual currency has a special feature that has been designed with the motive of encouraging traders for holding coins for a long period of time. In simpler words, this rewarding process works by hitting people selling their tokens with a ten percent tax fee on their transactions and out of those ten percent, half of it, being five percent will be distributed amongst the current holders of their coins. Now, some of you might be wondering as to what is done with the penalty tax fee of the remaining five percent. Let me help you with that. The remaining five percent is split equally, with half remaining as SafeMoon’s tokens and the other half being changed into Binance Coin or as often known as BNB.
For those of you thinking, why all of this happens. This protocol has been put into place so that they can encourage the holding of their tokens and limit the selling. This entire process will make traders think before selling the tokens as it is designed such that if they do, it will be giving an added advantage to the existing coin holders. Not just that, this is also done to minimize the sudden declines in the tokens due to the sale of currencies, which often can be seen leading to the fluctuation of prices and markets collapsing.
It is also being said that, the developers of the currency are manually destroying(burning) tokens quite often. To date, they have burned nearly four hundred trillion already, leaving less than six hundred trillion SafeMoon tokens in circulation across the industry. For those of you wondering why this happens, the logic behind it is simple actually. The smaller supply there is, the higher the prices go in the marketplace.
On SafeMoon’s official website, it says “Holders earn passive rewards through static reflection as they watch their balance of SafeMoon grow indefinitely.” the static RFI rewards that investors get, is what makes this digital asset unique from all the other cryptocurrencies in the market.
Investing in SafeMoon
Source: Medium
After the currencies launch in March this year, the prices of the digital asset increased by an enormous amount. From March 20 to April 20 alone, its prices went uphill by almost twenty thousand percent, peaking at 0.000014 dollars. The initial surge in prices plays a significant part in why investors from all around the globe are talking about SafeMoon. But unfortunately, after hitting its all-time high, the currency has dropped its value by nearly seventy percent till date.
You might agree with me that when we first heard of the currency, investors were really intrigued, but you need to keep this fact in mind before investing that there are several such currencies available in the market. Some of them appear in the limelight and some don’t. Not just that, many newer cryptocurrencies too, some of them find their way to the mainstream and become popular at least for a little while and some of them don’t.
In addition to this, a major factor to be considered is that SafeMoon is not listed in any of the popular cryptocurrency exchanges. Some people who are still interested in buying SafeMoon, get it on decentralized exchanges such as PancakeSwap, where trading is not that user friendly to say the least.
But it is important for you to know that SafeMoon dropped its value just over the last two months. In April, when the prices of the currency were at its peak, it was worth nearly 0.00001399 dollars and one trillion tokens would have been worth about fourteen million dollars. These numbers look very impressive but keep in mind that only a few people bought the virtual currency at its launch. Let’s just say that you bought it on March 12, the currency traded at a price of 0.00000002 dollars. So, if you would have invested just say a thousand dollars at that time, they would have bought you nearly fifty billion, while today that much currency would have been worth 175,000 dollars.
After reading so far, you might have understood the fact that SafeMoon is designed in such a way that people are encouraged to hold on to their investments for long but there is one thing we haven’t gone over, at least yet! Which is the fact that what does SafeMoon actually do and that is one of the biggest troubles faced because as a matter of fact, SafeMoon doesn’t do anything at all. The entire purpose of the virtual currency is to encourage people to buy their coins and its selling point is the hope that someday the prices of the virtual currency will skyrocket.
The company’s website talks a lot about their plans about setting up SafeMoon wallet, SafeMoon app and games, but will investors store their money in a highly volatile online wallet and give a fee of ten percent every time they decide to spend it. It has been found by a third-party audit that there is a major bug with its liquidity pool which the developers of the currency still haven’t fixed. Not just that, as you previously read, the company indulges in manual burns of their tokens in order for them to increase the prices but from where I stand, that too hasn’t happened yet! Moreover, it is being said that, SafeMoon doesn’t seem to be a safe investment, at least as of now.
Talking about investing in SafeMoon, I would definitely say that the currency is a risky investment and as of today, it is most likely that, if in any case, you invest in it today, the chances are that you will have to suffer losses. Founders of such cryptocurrencies usually develop a whitepaper explaining their currency and why is it worth and what it will help achieve or if it will solve any problems but instead of solving any real world issues, SafeMoon just focuses on manual burns and seller’s fee. Putting so much effort into such things rather than over ways the virtual currency could actually be useful, can be seen as a major red flag to start with.
Furthermore, marketing which the currency did has so far worked really well and has managed to build a passionate fan base but you need to be aware of the fact that, there is absolutely nothing here to indicate that investing in SafeMoon is a good investment.
It is a known fact that investing in cryptocurrencies is a risky task but this is much riskier when compared to others. As of today. SafeMoon can be said to be one of the most uncertain and dangerous places to put your money in.
In conclusion, it seems like there is a good chance that SafeMoon’s best days are already left behind it. I feel that if you are looking to invest in digital currency, there are much better options available in the crypto marketplace to choose from. It is also important for you to know that investing in digital currencies is risky and you should only invest if you are willing to take those risks and bear any losses if at all necessary.
What are your thoughts on SafeMoon? Do let us know in the comments below. To know more about various cryptocurrencies, do check out other articles we have on our website. Thank you for your time & if you found our content informative, do share it with your investor friends!
Also read: XRP: Everything you need to know