What Is SafeMoon and Is It a Good Investment?
With over 21,000 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 newer 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 2022?
What Is SafeMoon?
Safemoon was one of the newer 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, the coin had more than 2.9 million holders by January 2022, according to Utah Business. CoinMarketCap reports there are over 562 trillion coins in circulation. 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: $0.0000005866
- Market cap: $330 million
- Market rank: 216
Safemoon was designed to resist volatility by rewarding investors for holding their coins. It works with three simple functions: Reflection, LP Acquisition and Burn.
Static rewards, known as reflection, attempt to correct the problems with mining rewards. It does so in two ways:
- The reward amount is conditional upon the volume being traded, which mitigates 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. Five percent 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 $0.0000005866. 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. However, the price dropped to $0.00001118 by closing that day.
The current total market value of safemoon is about $330 million, ranking it 216th in terms of market capitalization, according to CoinMarketCap. Not bad for a new cryptocurrency competing with more than 21,000 other coins, but not necessarily a good investment, either.
Is It Safe?
With all the hype for a newer coin, it’s valid to wonder if it’s safe. Some analysts have concerns with safemoon. Unlike some other crypto projects, safemoon doesn’t actually do anything. Although the project plans to develop a non-fungible-token exchange and coin launchpad, for now, the entire purpose seems to be to get people to buy it and drive the price up.
It could see more buyers if the wallet gains more widespread use. Although more than 100,000 Android users had downloaded the wallet from Google Play by Oct. 1, 2021, according to BSC News, it appears not to have reached 200,000 downloads as of Sept. 22, 2022, nearly a year later. The iOS version went live on the App Store on Oct. 6, 2021 — and shot up to #10 within 12 hours, SafeMoon announced in a tweet.
Some Analysts Think It’s a Pump and Dump
As mentioned, the token is designed to discourage selling. That fact could 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.
Those analysts aren’t alone. A group of investors filed suit in February, alleging that safemoon used celebrity endorsements to promote misleading claims about the potential for investors to profit.
Where To Buy SafeMoon
As of Sept. 22, you can purchase safemoon seamlessly through the safemoon wallet, but you will need to buy bnb, or binance coin, then swap it for safemoon. You can also purchase safemoon on a number of exchange platforms, including PancakeSwap and Bitrue. Here’s a look at both options.
PancakeSwap is a decentralized exchange that lets you trade directly from your crypto wallet, which means you, not the exchange, are in complete control over your crypto assets. 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 because you’ll have to buy wrapped bnb first and then convert it to safemoon, similar to buying directly from the safemoon wallet.
Bitrue is a global crypto trading platform and exchange that lets you buy, trade and invest in over 700 cryptocurrencies, including safemoon. This exchange offers safemoon as part of a safemoon/tether pair, so you’ll purchase tether (usdt) first, and convert your tether to safemoon.
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.
Following a brief spike in October 2021, the price dropped quickly and has hovered near its current level since February. Considering that that price is just a tiny fraction of a cent and the maximum supply is astronomical, it seems unlikely that safemoon will see any serious gains short of successful use cases proving its utility.
Investing in cryptocurrencies can be extremely risky. Always consult a professional advisor and never trade money you can’t afford to lose.
In early 2021, safemoon’s price skyrocketed over 1,500%, then plunged. At this point, it would seem like a gamble to invest in safemoon.
Daria Uhlig contributed to the reporting for this article.
Data is accurate as of Sept. 23, 2022, and is subject to change.
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- Utah Business. 2021. "The Safemoon Fanbase Won’t Let the Utah-based Crypto Company Fail."
- Capital.com. 2022. "Safemoon Price Prediction: Will the Price Break Out?"
- CoinMarketCap. "SafeMoon."
- Cointelegraph. 2022. "Plaintiffs file for Dave Portnoy’s dismissal from SafeMoon lawsuit."
- Cointelegraph. 2022. "SafeMoon pump-and-dump lawsuit targets Jake Paul, Soulja Boy and others."
- Justia. 2022. "Bill Merewhuader et al v. SafeMoon LLC et al."