What the Heck is SafeMoon and Why Its Price is Rocketing?
Belgium (CoinChapter.com) — As new cryptocurrencies come to market nearly every day, it can be challenging to distinguish one from the next. SafeMoon is a project currently gaining a lot of attention, primarily in the price department. Is there anything to warrant excitement, or will this be another fad?
Penalizing Dumpers Is Similar To MLM Schemes
Interestingly, it may be a lot more complex to figure out what SafeMoon is or why it exists. As a DeFi token, its goal is to reward people who buy and hold the asset. However, for those who attempt to sell the asset, there will be a penalty to contend with. It is a different take on incentivizing users to hold, although penalizing those who want to sell is an awkward approach.
Although it makes sense to prevent pump-and-dump schemes in the cryptocurrency world, this approach may not necessarily be viable. It would help explain why the price is going up lately, as no one can sell assets without facing a penalty of sorts. With a fee of 10% of the amount being sold, one needs to establish significant profit. On paper, this will prove to be unsustainable in the long run unless there are more use cases for this token in the future.
Interestingly enough, holding on to the token is not entirely without risk either. SafeMoon will distribute $5 of the penalty charges to holders. However, if no one sells — or feels comfortable to sell — those fees might not necessarily contribute much. This approach is very similar to multi-level marketing, a business model that meets plenty of criticism, despite being a viable business approach.
SafeMoon Price Performance Raises Questions
It is interesting to see how SafeMoon performs over time. The past 30 days have yielded a gain of nearly 4,300%, yet the momentum is crashing down fairly quickly. There is a lot of market impulse involving this currency. It has already seen a significant decrease in value. Although the sentiment will remain choppy for the foreseeable future, it remains unclear whether there is much future price potential.
SafeMoon price performance. Source: CoinGecko
Considering the penalty for selling tokens, there will always be a limit to what will be possible. There are also some questions regarding the circulating supply, as the total supply appears to be capped at 1,000,000,000,000,000 SAFEMOON. A crazy amount, even under the best of circumstances, and one that raises many long-term viability questions.
It is currently only possible to trade SAFEMOON on a few platforms, including MXC, PancakeSwap, and BitMart. As is often the case where new tokens are concerned, it may take a while for more prominent platforms to adopt this currency — whether or not they will do will heavily depend on whether there will still be an interest in this currency a few weeks from today.
Should You Buy SafeMoon?
It is impossible to determine whether one should acquire SAFEMOON or not. Many questions are surrounding this project, and some of them cannot be answered right away. That is not entirely uncommon where new currencies are concerned, although many people prefer transparency first and foremost.
Some Reddit users are not too pleased with the overall concept either. Many people actively raise questions about the real purpose of this project in the long run, yet they may not find the answers. Additionally, there is a sheer lack of use cases for this asset beyond speculation, which isn’t looking too promising. Calling it a “Ponzi scheme” is a bridge too far, but many questions cannot be overlooked.
Closing Thoughts
It is not uncommon to see new tokens hit the market and spark significant price momentum right away. More often than not, however, these tokens tend to lose momentum quickly, leaving many investors behind. It is unclear if Safemoon will go down a similar route, although its “penalty” mechanism may not necessarily be sufficient to keep holders engaged for long.
It is always advisable for investors to conduct their own research before making any investments. In this particular case, it is challenging to dig up most details, albeit that situation will hopefully change for the better soon. For now, it may not be the best investment, especially if one is risk-averse. All of the unknown factors are worrisome, regardless of how one wants to look at them.
JP Buntinx has been writing about cryptocurrency since 2012. His interest in crypto, blockchain, fintech, and finance allows him to cover a broad range of different topics.
YEREVAN (CoinChapter.com) – Stablecoin issuance protocol Terra made headlines in the previous days after its governance token LUNA crashed...
Our Partners
We use cookies on our website to give you the most relevant experience by remembering your preferences and repeat visits. By clicking “Accept”, you consent to the use of ALL the cookies.
This website uses cookies to improve your experience while you navigate through the website. Out of these, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may affect your browsing experience.
Necessary cookies are absolutely essential for the website to function properly. These cookies ensure basic functionalities and security features of the website, anonymously.
Cookie
Duration
Description
cookielawinfo-checbox-analytics
11 months
This cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Analytics".
cookielawinfo-checbox-functional
11 months
The cookie is set by GDPR cookie consent to record the user consent for the cookies in the category "Functional".
cookielawinfo-checbox-others
11 months
This cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Other.
cookielawinfo-checkbox-necessary
11 months
This cookie is set by GDPR Cookie Consent plugin. The cookies is used to store the user consent for the cookies in the category "Necessary".
cookielawinfo-checkbox-performance
11 months
This cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Performance".
viewed_cookie_policy
11 months
The cookie is set by the GDPR Cookie Consent plugin and is used to store whether or not user has consented to the use of cookies. It does not store any personal data.
Functional cookies help to perform certain functionalities like sharing the content of the website on social media platforms, collect feedbacks, and other third-party features.
Performance cookies are used to understand and analyze the key performance indexes of the website which helps in delivering a better user experience for the visitors.
Analytical cookies are used to understand how visitors interact with the website. These cookies help provide information on metrics the number of visitors, bounce rate, traffic source, etc.
Advertisement cookies are used to provide visitors with relevant ads and marketing campaigns. These cookies track visitors across websites and collect information to provide customized ads.