SafeMoon was designed to reward long-term holders and costs sellers a ten% charge, with a part of that charge going again to present holders. First launched on the Construct and Construct (BNB) chain in March 2021, SafeMoon can now be purchased on some exchanges akin to Pancakeswap.
Although some might declare SafeMoon is immune to manipulation, others observe the dramatic volatility and fall of SafeMoon’s value in 2022 as probably uncommon buying and selling conduct. Traders ought to conduct thorough analysis earlier than making all funding choices, together with and particularly these contain cryptocurrencies.
Key Takeaways
What Is SafeMoon?
Digital currencies are digital property, secured by cryptographic encryptions and powered by the distributed ledger expertise referred to as the blockchain. Digital currencies akin to Bitcoin, Ethereum, and different stablecoins now function media of trade globally. Investing in cryptocurrencies will be difficult since 1000’s of them exist however solely a handful are actual. As an investor, it is best to analysis the standard and realness of a coin earlier than leaping.
Some distinct options of SafeMoon embody the static reward the place 50% of tokens from its transaction charges (normally 10%) are distributed to token holders, in addition to the handbook burn the place the availability of SafeMoon tokens reduces to extend the worth and demand. SafeMoon additionally has a self-sustaining liquidity pool that may siphon tokens within the type of charges, that are then added to the token’s liquidity pool on Pancakeswap.
Up to now 12 months, some celebrities have invested and endorsed SafeMoon. They embody social media character {and professional} boxer Jake Paul, with a YouTube channel of over 20 million subscribers, who has claimed that investing in SafeMoon could make everybody wealthy in the long term. Others are Brett Ratner and DJ Afrojack.
Investing in cryptocurrencies, Decentralized Finance (DeFi), and different Preliminary Coin Choices (ICOs) is very dangerous and speculative, and the markets will be extraordinarily unstable. Seek the advice of with a professional skilled earlier than making any monetary choices. This text is just not a suggestion by Investopedia or the author to spend money on cryptocurrencies nor can the accuracy or timeliness of the data be assured.
SafeMoon vs. SafeMoon V2
SafeMoon launched an up to date SafeMoon token in December 2021. The up to date token consolidates the unique model in a ratio of 1:1000 whereas guaranteeing transactions price decrease.
If you happen to maintain unique SafeMoon tokens in a pockets and select to change them to SafeMoon V2, it may well solely be accomplished manually. The switching course of is kind of straightforward.
SafeMoon pockets customers can replace the app to the newest model and observe the directions whereas these with different kinds of wallets can go to SafeMoon Swap to transform their tokens.
Moreover, for those who maintain your SafeMoon tokens on an trade, you do not have to change to the V2 tokens. It is because the trade handles the migration course of and offers an replace on the standing of the method.
In comparison with the unique model, SafeMoon V2 processes transactions at a a lot decrease price. The V2 transaction charge is now 2% of your entire transaction.
Another approach of shopping for SafeMoon is to make use of the SafeMoon Swap decentralized software that’s out there on the Construct and Construct chain. This manner you commerce BNB tokens for SafeMoon tokens.
SafeMoon Fraud Allegations and Criticisms
You will need to observe a number of allegations towards SafeMoon as a part of your analysis on deciding whether or not SafeMoon is the proper funding for you.
In April 2022, Stephen “Coffeezilla” Findeisen accused the SafeMoon group of misappropriating hundreds of thousands of {dollars}. Findeisen discovered proof of SafeMoon’s liquidity pockets shifting funds to a pockets known as the “Gabe (6abe) pockets,” which withdrew funds to a separate firm run by John Karony. Thomas “Papa” Smith, former SafeMoon CTO, responded to Findeisen’s claims, stating that funds had been taken from the “locked liquidity pool” earlier than Karony’s appointment.
In February 2022, a class-action lawsuit towards SafeMoon was filed, alleging the corporate is a pump and dump scheme. Jake Paul, Nick Carter, Soulja Boy, Lil Yachty, and Ben Phillips had been accused of selling the SafeMoon token with deceptive data. In Could 2022, a number of SafeMoon traders filed one other class motion lawsuit for safety fraud. The lawsuit was voluntarily terminated in November 2022.
In December 2021, SafeMoon developed Model 2 of their token, SafeMoon V2, and set a deadline for token migration to keep away from a 100% tax. In addition they launched a decentralized trade known as “Safemoon Swap.” In April 2022, they launched the Safemoon card, a 2.5% charge debit card for items utilizing SafeMoon and different cryptocurrencies. Nonetheless, the cardboard’s launch has been delayed, inflicting criticism from consultants.
Benefits and Disadvantages of SafeMoon
Professionals of SafeMoon
SafeMoon, like different cryptocurrencies, operates on decentralized blockchain expertise. This implies there isn’t any central authority controlling or governing the community. Decentralization can improve safety, transparency, and censorship resistance, as no single entity has full management over the platform. Notice that SafeMoon has obtained criticisms for manipulation, as even decentralized currencies will be managed.
A part of SafeMoon’s transaction charge is added to the liquidity pool, which is basically a sensible contract holding a reserve of the token. This liquidity pool can present stability to the token’s value by guaranteeing that there are funds out there for buying and selling even in periods of excessive volatility. The transaction charge that’s distributed to present token holders can incentivize folks to carry their tokens. Lengthy-term holders can profit from elevated token balances with out having to actively take part in yield farming or staking.
Whereas the first focus of SafeMoon is just not explicitly on yield farming or staking, the reflective tokenomics mannequin can create alternatives for holders to earn passive earnings. Some customers would possibly select to take part in yield farming on decentralized finance (DeFi) platforms that help SafeMoon or stake their tokens in protocols providing rewards.
Cons of SafeMoon
Regardless of a number of benefits, there stay an enormous variety of downsides to SafeMoon. The plain draw back of SafeMoon is the longer term public notion of the cryptocurrency. The success of SafeMoon, like many different cryptocurrencies, is closely reliant on group sentiment. As a result of SafeMoon has confronted a number of lawsuits and allegations of fraud, it stays to be seen whether or not the cryptocurrency will expertise progress or sturdy consumer adoption sooner or later.
Cryptocurrencies, together with SafeMoon, are recognized for his or her value volatility. Worth fluctuations can happen quickly and unpredictably, resulting in important features for some traders but additionally substantial losses for others. This was most notably seen throughout the 2022 lawsuit submitting when SafeMoon misplaced almost all of its worth.
Past speculative buying and selling and holding for potential value appreciation, SafeMoon has restricted sensible use circumstances. Additionally, regardless that it has existed for a number of years, SafeMoon is a comparatively new undertaking in comparison with extra established cryptocurrencies with undefined schedules and unproven roadmap execution.
Smaller cryptocurrencies like SafeMoon additionally might need restricted liquidity in comparison with extra established tokens. Although it does transmit some charges to liquidity swimming pools, restricted liquidity could make it troublesome for holders to execute massive trades at desired costs, making it potential however unprofitable to exist an funding place at instances.
Final and maybe most significantly, SafeMoon stays a speculative funding with an unproven enterprise mannequin that has but to expertise vast adoption. In sure contexts, SafeMoon could also be seen as a “rug pull”, as many traders doubtless misplaced a number of cash as a result of authorized ramifications of 2022. This isn’t to say future efficiency of SafeMoon might play out the identical approach; nonetheless, a draw back of SafeMoon is the historic context of a number of value volatility resulting in losses.
Like many cryptocurrencies, exists on decentralized blockchain
Operates a (comparatively small) liquidity pool
Operates a mirrored image mechanism which advantages long-term holders
Could current traders with DeFi alternatives
Has expertise materials value volatility (with out having rebounded near all-time highs)
Has skilled quite a few fraud and authorized allegations
Has but to materialize large-scale real-world makes use of
Tends to show Ponzi-like options
Could also be bigger to promote as a result of smaller liquidity swimming pools
Could have unfavorable public sentiment as a result of media protection of fraud (i.e. Coffeezilla protection)
How To Purchase SafeMoon
With this data in hand, do you have to nonetheless determine SafeMoon is the kind of funding greatest suited on your portfolio, there are crypto exchanges the place you should buy SafeMoon. Crypto exchanges are platforms the place a various ecosystem of cryptocurrencies will be purchased or bought. Nonetheless, traders should perceive that not all cash will be purchased with fiat however with different cash. One such coin is SafeMoon because it is not listed on any centralized trade that accepts fiat forex.
Whereas SafeMoon is not out there on the Coinbase or Binance centralized exchanges, you may nonetheless purchase the tokens on these exchanges utilizing the steps outlined under.
Step 1: Obtain the pockets and enroll
You possibly can set up your pockets in your laptop or browser extension or immediately obtain it through cell app shops such because the Google Play Retailer or the Apple App Retailer. After downloading the pockets, you could set a username that ought to be stored protected.
Step 2: Securing your restoration part
After downloading a pockets and organising the username, a 12-word restoration phrase shall be introduced to you for safekeeping. This restoration phrase is a key to your crypto that helps you keep your pockets ought to your machine get broken or misplaced. Keep in mind that you aren’t presupposed to share this phrase with anybody. Writing it out and holding it in a protected is good.
Step 3: Test to make sure you have sufficient Ethereum to cowl charges
The price of a transaction is determined by how busy the Ethereum community is, how shortly you need the transaction to be processed, and the dimensions of the transaction. Ethereum community charges are also called gasoline charges.
Step 4: Purchase and switch Ethereum to the pockets
After you have met the consumer verification requirement, you may switch money to your pockets and proceed to purchase some Ethereum cash with it. After buy, the Ether (ETH) cash shall be saved within the Ethereum pockets.
Step 5: Use the Ether (ETH) to purchase SafeMoon
Along with your ETH within the pockets, you may swap ETH cash for SafeMoon immediately. All you should do is click on the “swap” icon within the property tab, select SafeMoon, and swap ETH for the worth of SafeMoon you want.
What You Want To Open a Cryptocurrency Change Account
There are a number of necessities wanted to open an trade account. For decentralized exchanges, the method is fairly easy: Obtain the software program or browser extension, arrange an account, and retailer your restoration part.
For centralized exchanges, you’re anticipated to satisfy the know-your-customer (KYC) verification requirement earlier than with the ability to fund your account and commerce. Issues wanted to open an trade account are defined under.
In contrast to conventional brokerage corporations, cryptocurrency exchanges will not be members of the Securities Investor Safety Corp. (SIPC). Due to this fact, until consumer phrases specify in any other case, traders with cryptocurrency property commingled on a custodial cryptocurrency trade may probably lose their funds as unsecured collectors.
Private Info
Exchanges usually mandate clients to supply their private data to satisfy KYC necessities as mandated by regulatory authorities. Examples of non-public data required embody:
Full nameMeans of Identification akin to an Worldwide passport Proof of tackle akin to utility billsSocial Safety numberOthers as required by the trade
Minimal Deposits
Each trade has a variety of deposits that customers should fund their accounts with. For instance, Coinbase and Binance require customers to deposit a minimal of $50 and $10, respectively, to finish their trades.
Sorts of Cryptocurrency Exchanges
Centralized Exchanges
Centralized exchanges are custodial platforms that allow customers to trade their crypto property safely. Although safe, these exchanges take custody of a consumer’s personal key which is required to authorize transactions.
Authorities or companies that management centralized exchanges have the only real proper to make choices concerning the platform. Centralized exchanges have sustainable liquidity as they will companion with platforms that present them with liquidity.
Decentralized Exchanges
Decentralized exchanges are platforms that give customers sole custody of their personal keys and require the consent of the group to make key choices concerning the platform.
Decentralized platforms get rid of the necessity for third events, making transactions cheaper than centralized exchanges. Moreover, customers danger dropping entry to their accounts ought to they lose their restoration part.
Hybrid Exchanges
Hybrid exchanges have gotten fairly common. These exchanges mix the options of centralized and decentralized exchanges, permitting customers to commerce crypto seamlessly.