What is SafeMoon and Why Is It Taking the Crypto Market by Storm?

Here are things you need to know before investing in SafeMoon.

What is SafeMoon?

SafeMoon is one of the latest and hottest trends on the cryptocurrency market that is famous for extremely high volatility and new trends popping out faster than ever.

Technically, SafeMoon isn’t a cryptocurrency, but a DeFi (Decentralized Finance) token that was launched on March 8, on the Binance Smart Chains. According to Coindesk, the main goal that stands behind DeFi is to remove intermediaries such as banks from financial transactions. 

DeFi tokens are similar to cryptocurrencies in terms of transferability and transparency, but unlike cryptocurrency which is a type of asset, they are deemed to be financial tools that “are embedded with some kind of financial logic by their platform,” says Eidoo. DeFi tokens are to make traditional finance concepts automated and decentralized.

According to the SafeMoon website, they have “over 2,000,000 token holders.” What makes SafeMoon different from other cryptocurrencies is rewarding investors who buy its coins and hold on to them rather than trade by imposing a 10% penalty fee on sellers to redistribute half of it to SafeMoon holders. SafeMoon asserts that “You get rewarded by simply holding SafeMoon! The longer you hold the more tokens you pick up!”  

At the forefront of SafeMoon stands John Karony as the Chief Executive Officer who was an All-Source Analyst for the US Department of Defense. The CTO of SafeMoon is Thomas Smith who earlier worked as the CIO of Goldsmith Blockchain Consulting. Jach Haines-Davies is the COO, who previously worked in Likeandshare LTD, according to the LinkedIn profiles.

The SafeMoon buzz

By using social media, especially Twitter and TikTok, very strategically, SafeMoon has managed to create a very big community of over 871,000 community members. 

The excitement surrounding SafeMoon, blockchain-based digital currency, boosted by Social Media influencers, is insane and led to appreciation higher than the S&P 500 over the last decade. 

One of the influencers who are driving the SafeMoon price up exponentially is Dave Portnoy, who mentioned on his Twitter account with 2.5M followers that he had put $40,000 into this coin and would hold it for the long term. His video has been viewed 2 million times on Twitter.

The SafeMoon hype is also based on very effective marketing based on the computer game theme with well-aligned music and computer graphics which is not surprising when we know that the SafeMoon CEO - John Karony is a video game enthusiast and U.S. Army Veteran.

Watching the videos from the SafeMoon Twitter account, you can feel like you're on a space mission. The message about creating the SafeMoon Army is also well-designed for the target investors group as it creates a sense of belonging to the community of like-minded people. 

By showing people walking on the Moon in spacesuits and using specific space terminology like “mission”, “operation”, “landed”, SafeMoon makes an illusion that investors who have bought the SafeMoon tokens are part of the community, taking part in the space mission. Isn’t it what each man wanted to do when he was a child? 

The overnight SafeMoon success proves that the marketing team certainly realizes what their target group’s deepest desires are. By being aware that the majority of crypto investors are men, the SafeMoon team is able to create an extremely powerful message well-targeted at potential SafeMoon buyers. 

As each marketer knows, each product needs a catchy name. SafeMoon is no different. The SafeMoon name is the key element of this whole SafeMoon story as it is bound to the Moon and very coherent with the whole space mission message. Without its short, sweet, and very catchy name, SafeMoon wouldn’t exist. 

The fact that SafeMoon expands to “Safely to the Moon”, which is the wordplay with the “See you on the Moon” Dogecoin tagline not only doesn’t degrade it but even boosts its hype.     

What is the SafeMoon price?

As of this writing, the token’s price is a fraction of a cent - $0.000004989, with a live market cap of $2,403,061,368, and fully diluted market cap, amounting to $4,954,893,013, according to the CoinMarketCap.

SafeMoon’s market cap positions this coin as a niche coin, compared to more established coins such as Bitcoin with a $792.3 billion market cap, or Ethereum with a $365.1 billion market cap. However, SafeMoon is just over 2 months old so as for its market cap, it is still very impressive. 

Where can you buy the SafeMoon?

The top exchanges where you can buy the SafeMoon tokens are currently ZBG, Gate.io, BlueHelix Exchange, BitForex, and MXC.COM. 

How many SafeMoon coins are there?

According to CoinGecko, the reported total supply is 1 quadrillion - 1,000,000,000,000,000,000.  The amount of Burned Dev Tokens is 223 trillion, while the fair launch supply was 777 trillion tokens.

How does SafeMoon work?

The goal of SafeMoon’s creators is to make it less prone to price fluctuations intrinsic to other cryptocurrencies such as Bitcoin, Ethereum, or Dogecoin. To disincentivize short-term trading, SafeMoon charges anyone a 10% fee for selling tokens, which makes SafeMoon different from other DeFi tokens. 

According to the SafeMoon whitepaper, sales transactions are penalized  with a 10% fee, which is split into two ways. 5% of that fee goes to the existing SafeMoon holders, while the other 5% is transferred to the liquidity pool.

By implementing a 10% fee, the SafeMoon team hopes to cure two main challenges that pester the cryptocurrency market: high volatility and panic selling. 

Is SafeMoon a good investment?

The cryptocurrency market’s hallmark is high volatility and SafeMoon seems to follow suit the general trend as its price is prone to dramatic ups and downs which makes this investment extremely high-risk investment with high probability of losing all the capital. 

Despite all efforts to reduce volatility by introducing a 10% sales penalty, the SafeMoon’s price seems to be still extremely fluctuant. Starting at the price of $0.000000073 on March 20, SafeMoon made a tremendous 19,078% increase one month later, hitting an all-time high of $0.000014. As of this writing, SafeMoon is now trading at $0.00000458.

SafeMoon price fluctuations result from the incredible hype generated on Social Media by influencers. Some optimistic investors who purchased the SafeMoon tokens hope that its price will skyrocket like Dogecoin’s price, however, some skeptics don't consider SafeMoon a legit investment, and perceive it as a scam. To make things worse, some critics compare SafeMoon’s 10% seller fee stipulation to a “Ponzi scheme”, taking money from later investors to create profits for earlier investors. 

On the flip side, the sign of transparency and a positive signal is the fact that the SafeMoon team commissioned blockchain security firm CertiK, providing blockchain auditing service, for an audit. However, the results leave a lot to be desired. 

CertiK found 13 issues along with one including a major issue referring to centralization. In fact, the lowest score out of all categories gained safety assessment which scored just 72 points out of 100 with decentralization deemed as the weakest link.

According to the CertiK audit report: “Each SafeMoon transaction is taxed two 5% fees totalling 10% of the transaction amount. The first fees redistributed to all existing holders using a form of rebasing mechanism is accumulated internally until sufficient amount of capital has been amassed to perform an LP acquisition.When this number is reached, the total tokens accumulated are split with half being converted to BNB and the total being supplied to the Pancake Swap contract as liquidity.”

What is interesting, the audit report says that the SafeMoon team can exclude users from their system at will as not all users are integrated in this system and just a subset of token total users can be rewarded with a 5% fee.

Just after publishing the CertiK audit, the team announced on Twitter that SafeMoon was “CertiK Approved”; whereas, CertiK, the auditor, claims that its audit report is neither approval nor endorsement.  However, due to the unregulated cryptocurrency market nature, the SafeMoon team has decided to hold ‘Ask Me Anything’ sessions to reassure potential investors of its legitimacy.

One more red flag is the fact that 50% of the total supply is put in the creators’ hands.

The SafeMoon price is purely based on hype from the community and no utility stands behind the SafeMoon token so its price is subject to high ebbs and flows. Those who bought it early on in the upward trend gained huge returns, but you never know if the market is at the top or the bottom and how long the hype will last.

As the SafeMoon price stands on no fundamentals, but community sentiments that are very fickle and very much in flux, it is extremely difficult to predict any trends of this DeFi token. 

How to buy SafeMoon?

On the SafeMoon Twitter account, you can watch a video which presents in detail how to acquire SafeMoon. The following steps are taken from that video:

1. Download Trust Wallet.
2. Create a Trust Wallet account.

Tip: Keep your 12 word key phrase safe and secure in multiple places. 

3. The procedure is allowed only on Iphone, where you need to open Safari browser and enter the following url: trust://browser__enable.
4. Open browser.
5. Open Pancakes.
6. Hit Connect. 
7. Connect Trust Wallet.
8. Select Safemoon.
9. Set Slippage to 12%.
10. Enter the amount you want to swap.
11. Hit Swap.
12. Confirm Swap.
13. Wait 2 minutes.
14. Update the balance.  

What are SafeMoon’s plans?

On the SafeMoon website, you can find a road map with what the team will be up to in 2021. 

In the first quarter, the SafeMoon team successfully initialized the SafeMoon protocol which led to doubling the team size and the marketing campaign implementation. They also onboarded and confirmed a DogeCoin trading pair with Bibipom and began integration process with WhiteBit and legal paperwork with Bitmart. In the second quarter, the team is planning to complete the SafeMoon app, wallet and games.

There are also plans to finish the Whitebit and the Bitmart tokenomics integration. SafeMoon is also planning on architecting the NFT Exchange and video-game integrations and integrating SafeMoon with African Markets. The SafeMoon team has laid out the plan to architect the SafeMoon Exchange, expand the team by 35% and establish an office in the U.K. and Ireland. 

Apparently, SafeMoon makes big plans and thinks big; however, having so much on the plate can be challenging as each of the items to be ticked off will take a lot of time and effort.  

The Bottom Line

After Bitcoin or Dodgecoin’s successes, investors are constantly seeking cryptocurrencies which have the potential to go sky-high in the blink of an eye. However, such investing opportunities don’t happen so often and each investor should do their own due diligence of the target asset by evaluating any risks before putting skin in the game.    

Conclusion

Current markets driven by cheap money from stimulus checks, quick access to information, and young investors hungry for a get-rich-quick scheme are immensely subject to distortions generated by social media influencers or memes. Personality and the crowd of followers are enough to promote any project and shill its price dramatically as they matter much more than any due diligence. It shows that even projects based mainly on hopes and wishes can gain huge popularity.  

Looking for the underpinnings of the overnight SafeMoon success, it falls into the world trend by proving that great marketing and PR made by social media influencers can work miracles and attract a community of over 871,000 members in less than 3 months. As this project has basically no history, it is extremely hard to tell if it is a good or bad investment, or maybe a scam. Investors who are able to accept high risk will probably plunge into SafeMoon mania while those who are more risk-averse will stay away from it.  

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Disclosure: On the date of publication, the author did not have (either directly or indirectly) any positions in the securities, cryptocurrencies, or DeFi tokens mentioned in this article.

Disclaimer: The information contained herein is for informational purposes only and nothing in this article should be taken as a solicitation to purchase or sell securities, cryptocurrencies, or DeFi tokens.