Should you (or anyone) buy Safemoon?
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The new Safemoon cryptocurrency is not a household name, but it has caught the attention of investors looking for the next big altcoin. With the price of Bitcoin still above $ 30,000, even after it fell following the Chinese bank crackdown, many are looking for other cryptocurrencies with a lower price and potentially higher returns.
Safemoon definitely responds to the lower price qualification. It is currently trading for fractions of a dime, which means you can get over a million from Safemoon with just a few dollars. It also has a nice hook of charging a fee to anyone who sells and distributes half of those fees to Safemoon holders. This is designed to benefit those who buy and own.
Despite all of its hype, Safemoon has some serious flaws that should make you think twice before you buy. To help you make an informed decision, let’s take a look at how this cryptocurrency works and why it is so risky.
What is Safemoon?
Safemoon is a cryptocurrency launched in March. The initial supply was a quadrillion tokens, but the developers burned (destroyed) $ 223 trillion. That left a launch supply of 777 trillion. It is not listed on the major cryptocurrency exchanges, so most buyers get it on the decentralized PancakeSwap exchange.
The key concept behind Safemoon is a royalty for its sale. If you sell your Safemoon, you have to pay a 10% fee. These 10% break down as follows:
- 5% are redistributed to existing holders
- 5% is split evenly, with half converted to Binance Coin (BNB) and half the remaining Safemoon tokens, then pairing them up for use in a cash pool.
According to the Safemoon team and their fans, these fees will make people stick with it instead of feeling pressured to sell. However, an audit by the security platform CertiK revealed what it called a major issue here. An owner address will acquire the liquidity pool tokens generated by the Safemoon-BNB pool. This gives the owner control over the tokens funded by Safemoon’s selling costs.
The developers of Safemoon also manually burn tokens on a regular basis. They have already burned over $ 400 trillion and there are now less than 600 trillion Safemoon tokens in circulation. The logic behind token engraving is that a smaller offering should, in theory, increase the price.
And after the launch of Safemoon, the price has increased by an astronomical amount. From March 20 to April 20, its price rose nearly 20,000%, peaking at $ 0.000014. This initial rise is part of the reason crypto investors are talking about Safemoon. But since reaching its all-time high, Safemoon has fallen by more than 70% at the time of writing.
Safemoon is the furthest thing from the safe
The design of Safemoon aims to encourage its conservation and to drive up the price. There’s one thing we haven’t gotten past and that’s what Safemoon is doing. And this is one of the biggest problems.
Safemoon does nothing.
Its sole purpose is to get people to buy, and the selling point is that hopefully the price will skyrocket.
Safemoon’s website makes vague allusions to future plans. He mentions the establishment of a Safemoon application, a wallet and video games. It is a question of “integrating Safemoon into African markets”. He also apparently has “Project Pheonix” (the misspelled title is a deliberate choice by Safemoon) in the works. Details on this are scarce, with CEO John Karony simply saying “SafeMoon is going to be the fuel for the freedom of the unbanked.”
Everyone’s guessing how that would work. It’s hard to see what Safemoon could do for people without a bank account. Are they going to want to store their money in an extremely volatile cryptocurrency and pay a 10% fee every time they spend it? Safemoon can’t just get rid of seller fees, as this is an integral part of it.
As it stands, Safemoon has no purpose. A third-party audit revealed a major issue with its cash pool that the developers haven’t addressed. And while manual burns are supposed to increase the price, that hasn’t happened. Safemoon is certainly not a safe investment, and it probably won’t go to the moon either.
Buying Safemoon is a bet
I first heard about Safemoon a few weeks ago. My first thought was that it looked like a pump and a dump, and the pump was already finished. Nothing that I have seen since has improved my opinion on this matter.
Spend time on crypto forums and you see hundreds of tokens like this. We don’t talk about what they do, only the price and how they go to the moon. Some people who come downstairs make huge payouts, but most aren’t that lucky. If you are interested in buying crypto, there are much better options than Safemoon.
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Lyle Daly owns Bitcoin, Binance Coin, and PancakeSwap.
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