What is Safemoon?
Safemoon titles itself as a DeFi token (decentralized finance). Basically, this means it exists as an alternate financial system much like all other cryptocurrencies. It does this via the enabling of trade on peer-to-peer chain networks devoid of interruption and intervention of centralized bodies such as governments and banks.
Much like all other cryptocurrencies, Safemoon operates on a blockchain network.
Following its launch in March 2021, the coin seemed to have amassed a following. This mostly stems from the promotions of C-list celebrities such as Jake Paul, who’s known for his controversies as well as the endorsement of NFTs. With a market cap of a mere $1.2 million as of May 2021, Safemoon still garnered an array of investors.
However, the high remained short lived. Following the 99% growth of the coin as of April 2021, the coin witnessed a massive drop of 33% in December. With a single coin selling for only a fraction of a dollar. And the decline just seems to continue.
The upsides
- Branding
One of the most important facets of Spacemoon involve the name of the coin. This contributes to the hype it’s managed to garner. With almost 13,000 cryptocurrencies swarming the internet, making a name comes as no easy task. While this may be owed to the promotion and endorsement of major celebrity figures, it still helps set Safemoon apart from other nameless DeFi tokens.
- Passive income
Another advantage for holders of SafeMoon comes from its fee policy. While unrealistic and exorbitant for the seller, the 10% per every sold coin, is divided up amongst the existing holders. This means existing holders generate a passive income whenever an investor sells a coin.
Downsides
- Not a utility token
Easily one of the biggest disadvantages of SafeMoon comes from its inability to be resold. It provides no utility to it’s holders, wherein most places do not accept it as a currency.
- Lack of liquidity and Volatility
SafeMoon possesses high volatility, along with other meme altcoins (See here for DogeCoin). Furthermore, the lack thereof of liquidity leads to massive fluctuations in the price of the coin.
Criticism and the Ponzi scheme of Safemoon
Crypto analysts state that Safemoon follows the old fashion pyramid, commonly known as Ponzi Scheme. According to analysts, most meme altcoins follow a design wherein early investors and buyers stand to get rich at the expense of the later buyers.
Should you buy it?
No.
Unless you plan on riding the upcoming hype train and quickly getting out in the green, this does not appear to be a good investment. If you decide to ride that wave, be mindful that it will be a highly risky move that has only worked out for very few investors.
