Safemoon, what you should know about this DeFi token
Safemoon is a brand new DeFi token that has created a lot of infatuation in the past weeks. Safemoon, known for its high ROI, has caught the eye of new and experienced investors. But how did this token start? Who is behind it? This article will answer these questions and more.
What is Safemoon ?
First of all, it’s a Decentralized Finance (DeFi) token. DeFi tokens refer to any kind of token that simplifies the creation of decentralized applications. So Safemoon is technically not a coin nor a cryptocurrency. Safemoon is also based on its own blockchain.
One unique thing about this token is that it actually encourages holding. Anyone who tries to sell their Safemoon tokens will immediately be charged with a 10% fee. The creators say this is to discourage people from selling off their tokens. Also, out of the 10% fee that is charged to the sellers, 5% goes back to all Safemoon users as an incentive for holding.
How did Safemoon start ?
Safemoon is relatively new. It started in March 2021 and is barely three months old. It was launched by its current CEO, John Karony, who goes by the name: @cpthodl, on Twitter. It goes by the motto “Safely to the moon,” probably to allay newbie fears. Currently, its CTO is Thomas Smith, who is also the co-founder of Safemoon.
Much is not known about this token, although the developers have outlined a roadmap on Safemoon.com. As time goes on, we would learn more about this new token.
Does Safemoon run on any projects ?
The hallmark of any promising cryptocurrency is its use case or project it’s used in. Every crypto investor knows that if there’s a project behind a coin or token, then there’s a higher chance it would do better than others that aren’t. According to Safemoon’s official site, the team is working on developing two exchanges: an NFT exchange and a Safemoon exchange. The Safemoon devs might complete the NFT exchange in Q3.
Price and market capitalization
At the time of writing, 1 Safemoon is equal to $0.00000892. This means $1 can buy about 112485 Safemoon tokens. Held by about 1.8 million people, the popular cryptocurrency has a $4.5 billion market cap. Market cap is an indication of how valuable an asset, like crypto or stocks, is.
Just like any cryptocurrency, Safemoon is very volatile. One reason it has attracted so much attention is its pumps. From April to May 2021, the coin rallied more than 900%. From March to May, Safemoon increased almost 120 times more since it launched! No wonder everyone wants to get a piece of the Safemoon cake. But is Safemoon safe?
Can I buy Safemoon now ?
Cryptocurrency itself is a risky investment and should only be done with spare money. On April 22, 2021, Safemoon holders experienced a big shock. The token plummeted a vast 66%, even though it rose by 100% the day before.
If you are comfortable making high profits AND huge losses, you could get your hands on some Safemoon. If you can’t, you should go for less volatile cryptocurrencies like Bitcoin (BTC) or Ethereum (ETH). (This is not a financial advice.)
What exchanges can I buy Safemoon from ?
Safemoon can be obtained from PancakeSwap, BitMart, ZBG, WhiteBit and BakerySwap. It has not yet been listed in top-tier exchanges like Binance and Kraken, so you won’t find it on there. The Safemoon community says it would work on a donation project token to be listed on the big exchanges.
Till that happens, you can either buy it from a smaller exchange like ZBG or swap BNB for Safemoon on PancakeSwap and BakerySwap. If the token eventually gets listed on a significant exchange, it could really shoot up and make holders smile to the bank.
Can Safemoon be mined ?
No, Safemoon cannot be mined. This is because all tokens have already been released at launch. To reduce its circulating supply of 586 trillion dollars, the developers said they would burn the token regularly. Burning reduces supply and usually increases a coin/token’s value over time.
Do not fall for any site or person that tells you Safemoon can be mined. Just like Binance Coin (BNB), Safemoon will constantly control the supply. So they can’t be mined, no matter the kind of mining equipment or technique a site claims to use.
Is Safemoon a Shitcoin ?
A coin that pumps and dumps massively in a short period is usually suspected of being a shitcoin. Shitcoins are coins with no real value and can amount to nothing after a while.
One reason why people think Safemoon is a shitcoin is because of the fees we talked about earlier. As holders sell off their tokens, the ones who still hold are rewarded for doing so. This means that as more people trade the coin, those initial buyers will continue getting their rewards. But what would happen if all Safemoon holders were interested in the reward and therefore decided not to sell their assets? You’re starting to get it, the price would increasingly tumble since there are no more rewards like before.
Another reason why Safemoon is being considered a shitcoin is because of its liquidity. The Safemoon team has locked 50% up of its liquidity, meaning that at any time, they can decide to bail, and the coin instantly becomes worthless. This lack of liquidity might lead to a rug pull, a scenario where investors are “scammed” of their investments.
Also, the coin’s model encourages accumulation and not trading. People are encouraged to accumulate now because it is cheap, hoping that it’s value would increase in the future. Because this coin does not really have any project at its core, more buyers are needed to sustain the price. This reason is why some people think it’s nothing but a grand Ponzi scheme.
Conclusion
Safemoon is an exciting new DeFi token that can be a good investment or a fair token for trading because of its big moves. However, you should always trade new cryptocurrencies and other digital assets with caution. Please do your research before you invest in anything.
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