What Is SafeMoon and Is It a Good Investment?
With over 5,000 cryptocurrencies available on the market today, and more getting added daily, it can be tough to know which ones to research and invest in. Popular coins like Bitcoin and Ethereum have taken the world by storm, with massive valuations. But not all cryptocurrencies will be successful. Many will fail, and some are scams.
This article explores one of the newest cryptocurrencies, SafeMoon. You’ll learn about the history of the coin, how much it’s worth now, whether or not it’s safe and if it’s a good investment. Will SafeMoon be one of the next big cryptos to explode in 2021?
What Is SafeMoon?
SafeMoon is one of the latest cryptocurrencies to hit the market in 2021. This crypto project is a community-driven approach to decentralized financial systems. After the initial launch in the first quarter of 2021, there are now more than 2.3 million holders of the currency. The founders wanted a coin that would ensure “safe” gains and prevent the inevitability of bubbles.
SafeMoon crypto developers have a long-term vision for the future success of the cryptocurrency. Holders earn passive rewards over time, and penalties discourage selling.
- Current price: $0.00000426
- Market cap: $2.49 billion
- Market rank: 203
SafeMoon crypto works with three simple functions: Reflection, LP Acquisition and Burn.
Static rewards, known as reflection, attempt to correct the problems with farming rewards. It does so in two ways:
- The reward amount is conditional upon the volume being traded, which mitigates against selling pressure caused by early adopters selling their coins.
- It encourages those holding the tokens to collect higher payments based on the total number owned.
This static approach differs from traditional mining rewards. For example, with Bitcoin (and other tokens), early adopters earned more rewards for their mining efforts than latecomers because the reward value decreases over time.
That means early adopters generally have more crypto than new buyers. SafeMoon’s static reward approach attempts to mitigate the problem of early adopters selling their coins en masse.
According to the official white paper, the automatic liquidity pool is the “secret sauce” of SafeMoon. This function creates a solid price floor for both buyers and sellers.
The design is for long-term stability. The unusual feature of SafeMoon is the penalty for selling coins. For every transaction, the smart contract charges a 10% fee. 5% of the fee is split among existing holders, encouraging investors not to sell their tokens.
According to the project’s white paper, the goal is to “prevent the larger dips when whales decide to sell their tokens later in the game, which keeps the price from fluctuating as much.”
Most cryptocurrencies undergo a process called token burning, which permanently removes tokens from circulation. This process is an attempt to create increased scarcity, and thus value. Some crypto projects perform continual coin burns from the start.
However, SafeMoon employs manual burns instead of continuous burns. The argument is that this process can implement a beneficial burn strategy for long-term investors. It also allows the burns to be announced and tracked publicly, leading to increased transparency.
How Much Is SafeMoon Worth?
Because SafeMoon is so new, there isn’t much historical data to go on. Currently, the price is about $0.000004. Soon after it launched, it saw a massive price jump to an all-time high of $0.00001399 on April 20, more than 1,560% higher than the previous week.
The current total market value of SafeMoon is over $2.49 billion, ranking it just over 200 in terms of market dominance, according to CoinMarketCap. Not bad for a brand new cryptocurrency competing with more than 5,000 other coins.
Is It Safe?
With all the hype for a new coin, it’s valid to wonder if it’s safe. Some analysts have some concerns with SafeMoon. Unlike some other crypto projects, SafeMoon doesn’t actually do anything. The entire purpose seems to be to get people to buy it and drive the price up.
Some Analysts Think It’s a Pump and Dump
As mentioned, the token is designed to discourage selling. That fact is likely to drive the price up over time, benefiting the owners and early adopters. The hype and frenzy over crypto in social media are adding fuel to the fire.
Some analysts even go so far as to say they believe it is a pump-and-dump scheme. That means that people who bought the coin early will “pump” it up, encouraging others to buy. Then, they will sell or “dump” their coins into the unsuspecting crowd, which inevitably will drive the price back down.
Where To Buy SafeMoon
As of April 2021, you can purchase SafeMoon on PancakeSwap and BitMart. Here’s a look at both options.
PancakeSwap is a decentralized exchange that lets you trade directly from your crypto wallet. That means you are in complete control over your crypto assets, not the exchange. Of course, that means you are responsible for the safety and security of your wallet, and you won’t receive the benefits that some crypto exchanges offer. But, if you want 100% control of your crypto, it’s not a bad option.
Buying SafeMoon on PancakeSwap can be confusing. To be able to purchase it, you will need to buy BNB, or Binance Coin, then convert that to Smart Chain. You can then swap this for SafeMoon.
BitMart is a global crypto trading platform and exchange with over 5 million customers in over 180 countries. The exchange’s priorities are trustworthiness, accessibility and professionality. The exchange has offices in New York, Singapore, Seoul and Hong Kong. Most trading on BitMart is spot trading, but it does offer futures and advanced trading capabilities.
Is SafeMoon a Good Investment?
Given that SafeMoon doesn’t do anything and the only future expectation of profits is that more people will continue to buy, it doesn’t seem like a good investment.
In early 2021, the price skyrocketed over 1,500%, then dropped again by 73%. At this point, it would seem like a gamble to invest in SafeMoon.
That being said, the current price does seem to be a floor since late April. The price has hovered at this level several times since then. That could lead to a bounce, or the floor could be broken and the price could continue to fall. Nobody knows.
GOBankingRates’ Crypto Guides
- What Is Cardano? (ADA)
- What Is Bitcoin? (BTC)
- What Is Bitcoin Cash? (BCH)
- What Is Chainlink? (LINK)
- What Is Dogecoin? (DOGE)
- What Is Litecoin (LTC)
- What Is Polkadot? (DOT)
- What Is Ripple? (XRP)
- What Is Tether? (USDT)
Data is accurate as of June 17, 2021, and subject to change.
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