What Is SafeMoon And Can The Crypto Newcomer Attain The Moon?

SafeMoon is a relative newcomer to the cryptocurrency market, recognized for its large volatility, excessive transaction charges of 10% and social media hype. SafeMoon, like better-known crypto cash like Bitcoin and Ethereum blockchain’s Ether, relies on distributed ledger expertise and was created in March 2021 on the Binance Good Chain blockchain.

SafeMoon’s creators say it was designed with the intention of encouraging long-term funding. Half of the ten% charged throughout transactions is shared amongst long-term holders, and the opposite to a liquidity pool that’s supposed to stabilize the worth of SafeMoon, in distinction to Dogecoin, Shiba Inu Coin and a lot of different cryptocurrency that appeared on the floor to be both a joke or bogus. However identical to Akita Inu, Dogelon and different a lot smaller crypto breeds, SafeMoon gave the impression to be making an attempt to money in on Dogecoin’s recognition by investing in meme tradition. 

As a result of the payment for purchasing into SafeMoon goes again to its earlier buyers, SafeMoon has been regarded by some — together with one SafeMoon investor — as a “Ponzi” scheme — an allegation that SafeMoon’s CEO emphatically denies. 

The mission’s founders say they designed SafeMoon for long-term funding, and the ten% transaction payment is about deliberately excessive to discourage folks from promoting the coin and encourage long-term HODLers.  

SafeMoon is taken into account to be among the many riskier investments within the crypto world. Like Shiba Inu, Safemoon has no specific use and derives its worth solely from different buyers shopping for in — which is why some have referred to as SafeMoon  a “shitcoin.”

Nonetheless curious about SafeMoon? This Forkast.Information explainer will make it easier to be taught extra.

What’s SafeMoon — and why is it well-known?

SafeMoon is a cryptocurrency token that was launched below BEP-20 tokens on the Binance Good Chain (BSC) blockchain. Within the blockchain ecosystem, there are decentralized finance (DeFi) platforms and centralized finance (CeFi) platforms. The DeFi ecosystem isn’t regulated by a central financial institution however the property present publicly on the blockchain community whereas within the CeFi eco-system, property are being dealt with via an intermediate trade. The BSC blockchain incorporates SafeMoon to run in a CeFi ecosystem. 

Throughout the second quarter of this yr, the worth of SafeMoon doubled following the endorsement from celebrities resembling rapper Lil Yachty, UFC boxer Jake Paul and standard sports activities blogger Dave Portnoy. 

By market capitalization, SafeMoon is presently ranked 91st largest of all cryptocurrency, in response to CoinGecko, whereas CoinMarketCap presently ranks SafeMoon because the 207th hottest out of all crypto, as of publishing time.

However each CoinMarketCap and CoinGecko agree that SafeMoon’s present worth is greater than 70% decrease than its all-time excessive earlier this yr. CoinGecko says SafeMoon’s all-time excessive occurred on Could 11, whereas CoinMarketCap stories SafeMoon’s worth peak as occurring on April 20 this yr. (To seek out out why these two main cryptocurrency rating websites generally report wildly completely different dates and numbers, please see this Forkast.Information explainer on crypto economics.)

Historical past Of SafeMoon

SafeMoon is without doubt one of the crypto token requirements designed to increase to Ethereum requirements  on the cryptocurrency ecosystem. SafeMoon was developed by six builders and launched on the BSC blockchain on March 8, 2021. The identify was derived from a phrase “Safely To The Moon” which means that the intention of the coin is to not rise solely however to rise safely. Since inception, the coin now has greater than 2.9 million holders, in response to BscScan.

Core options of SafeMoon

  1. Reflection: The white paper of the mission stories that SafeMoon holders are charged a transaction payment of about 5%, which is distributed among the many holders of the coin.
  1. LP acquisition: The white paper additionally revealed that this second core part of the mission fees transaction charges of about 5%, which can be issued to numerous liquidity swimming pools on PancakeSwap and different platforms.
  1. Token burn: The mission’s white paper additionally showcased that each transaction that happens on the mainnet is taxed 10%. The thought is that 5% of the tax can be as reflection rewards whereas the opposite 5% goes to the liquidity swimming pools. Half of the 5% that goes to the liquidity swimming pools are transformed into Binance Coin (BNB) with the intention to assure the liquidity of the SafeMoon and Binance coin pair.

How does SafeMoon work?

Since its launch on March 8, 2021, SafeMoon has collected a market capitalization of about US$1.9 billion  whereas Bitcoin has a market cap of about US$1.1 trillion.

Merchants are compelled to pay a ten% cost, with half of the cash going to SafeMoon’s present holders and the opposite half going to a liquidity pool (in an effort to raised keep worth stability).

SafeMoon’s creators additionally lower the amount of SafeMoon in circulation. 

What are the principle criticisms of SafeMoon?

SafeMoon, like many cryptocurrency cash, is a extremely speculative asset with no inherent worth. Listed below are a number of different dangers to consider.

Volatility: SafeMoon’s worth has been extremely erratic since its launch, growing greater than 20,000% earlier than plummeting greater than 70%. As a result of cryptocurrency cash don’t have any intrinsic price, your revenue relies on what you paid and the way a lot you’ll be able to promote it for.

Regulation: Cryptocurrency cash are very new, and governments are simply now studying about them and their potential impact. Crypto buying and selling has been banned by China owing to the monetary risks they symbolize and the speculative buying and selling they encourage. Greater tax charges on crypto earnings might probably be a type of regulation.

Liquidity: For merchants eager to get in or out of SafeMoon quick, the truth that they discourage promoting through the ten% cost might make liquidity an issue. SafeMoon is traded on Binance and PancakeSwap, platforms that allow a number of cryptocurrency cash to be traded.

Backside line: Due to the centralized nature of proof of authority, SafeMoon, like all different tokens on BSC, is actually on the discretion of Binance. If Satoshi Nakamoto reappeared and had direct entry to Bitcoin’s code, he may change it and have it applied by each miner and node within the community, the community would not be decentralized, reducing belief within the system.

All ships, nevertheless, are likely to rise with the tide. If Bitcoin continues to rise on this bull market, there’s a risk SafeMoon will rise as nicely, and different speculative buyers might drive it even larger.

What does the longer term maintain for SafeMoon?

 A roadmap of the SafeMoon staff’s targets for the upcoming yr,  on the SafeMoon web site, is presently clean.

A message on SafeMoon’s roadmap web page says:

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