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It often gets difficult to differentiate which crypto project is fake and which is genuine in the crypto world. Since in the recent past, many scam projects such as SquidGame token. Along with such incidents and the emergence of meme coins, the investors get a little skeptical. Many fingers are pointed at SafeMoon, too. Let’s find out what it is?
What Is SafeMoon?
A cryptocurrency, Safemoon, launched just last year in March 2021. SafeMoon is a BEP-20 token released on the Binance Smart Chain (BSC) ecosystem. SafeMoon is also considered competition to the decentralized finance(DeFi) ecosystem of Ethereum. SafeMoon, too, just like some digital currency, is powered by blockchain technology.
It came into the spotlight when its price shot up in April of the same year. The main focus of the designers while developing the chain was on rewards that the platform would distribute to the long-term holders. The platform, as of now, charges a 10 percent fee, a fraction of it goes back to existing holders.
Creators Of Safemoon:
As per the official website, six members run the token. Interestingly, the members share a work history. According to his LinkedIn profile, John Karony is the CEO at SafeMoon.
Some members have a background in web development, general management, or game development. SafeMoon’s VP of research and development, Henry “Hank” Wyatt, has even launched his game development company.
Jacob Smith, the developer of Safemoon, also carries work experience in a game development company.
Henry Wyatt is the only team member to have earned a four-year degree. The rest look to have spent brief periods at universities or colleges.
Henry Wyatt is the only person to have a four-year degree among team members. However, the rest of the members have just a brief experience of going to college/ university.
The team members are often seen promoting the token on Twitter. Their official website also has SafeMoon merchandise, hoodies, hats, sweatpants, and more, which is quite rare for cryptocurrencies. Many, however, predict that the money can be utilized for development purposes.
How Does SafeMoon Work?
According to the official website, the cryptocurrency has three key components:
- Reflection: Reflection is the first component. It is where the fee on a transaction is charged by the Safemoon, a part of which is distributed among token holders.
- LP Acquisition: In the second component, the transaction fee is distributed among the various liquidity pools on different platforms such as Pancake Swap.
- Burn: Burning of the tokens that occur with each trade compromises the third component. However, the exact official data is not available on what percentage of each transaction gets burned. There is only the mention of the split of 10% transaction fee.
Reflection rewards made 5% and liquidity pools the other half of 5%. In order to ensure the liquidity of the Safemoon and Binance Coin Pair, 2.5% of 5% that goes to liquidity pools is converted into Binance Coin(BNB).
The whitepaper of the asset states that they plan to have manual token burns by the team. The burns will be done at the team’s discretion, however, the burns are not pre-built mechanisms in Safemoon’s protocol. So far, around 416 trillion Safemoon have been burned.
CertiK, a blockchain security firm, found out that the owners get tokens created from the liquidity pool during an audit of Safemoon. This gives holders control over tokens as part of the fee. The firm highlighted this as a major concern in its report and even asked Safemoon to improve its security features.
As per the data from coinmarketcap, the total supply of SafeMoon is one quadrillion tokens, with a circulating supply of 585,536,366,402,812 tokens.
The design goal of Safemoon is to motivate early investors, not to sell. It even has been successful in doing so as it has created a base of loyal early investors, this, however, has also encouraged a lot of criticism from many.
Similar to other cryptocurrencies, an investment in Safemoon could be risky. Liquidity is also a challenge in Safemoon. The team discouraging the traders from selling through the 10 percent fee can potentially challenge liquidity. Safe Moon is bought and sold on Pancake Swap, which facilitates trading in various cryptocurrencies.
What Makes SafeMoon Unique?
As mentioned in the SafeMoon whitepaper, the token aims to counter a big challenge in the growing DeFi industry: the presence of high APY LP-farms preventing newcomers from having a smooth entry into the ecosystem.
The SafeMoon team aims to execute the static rewards concept for taking away the burden that might happen at the time of sale of tokens. The whitepaper also states that the “reflect mechanism” helps add incentive for SafeMoon holders to keep their tokens for longer.
Bitcoin Vs. SafeMoon: What Is The Difference?
As mentioned earlier, SafeMoon is issued on Binance Smart Chain (BSC) ecosystem. Below we discuss the difference between both the chains.
Proof of Authority
The Binance Smart Chain uses a proof of authority consensus mechanism, in which validators are the block creators. The validators are chosen by Binance and are pre-approved. In order to get approved, they must verify their real identities. While to prove long-investment commitment and be fair to all the candidates, they should invest money.
Binance gets complete control over the blockchain in this model. It decides who will be a validator and who should be removed at its discretion.
Proof of Work
On the other hand, Bitcoin uses a proof of work consensus mechanism. Proof of work has successfully ensured that no bad acts corrupt the decentralized system. PoW is the original consensus mechanism used by blockchains.
In proof of work mechanism, nodes compete with each other to process and validate transactions. The system solves complex equations. After they’ve won, the computer adds a new block of transactions to the blockchain. These computers are called miners, and every time they complete a block of a transaction, they get Bitcoin as a reward.
PoW is energy-intensive and ensures the network is secured. Miners all around the world make this work without a central authority.
SafeMoon Price Prediction
At the time of writing, the price of SafeMoon was recorded to be $0.000001 with a 24-hour trading volume of USD 75,837.12. In the last 24 hours, SafeMoon has been down by 4.96%.
Wallet Investor predicts the price of Safemoon cryptocurrency tokens will reach $0.000237 by 2026. The revenue is expected to increase by 4640% with a 5-year investment.
Gate.io, Bitrue, MEXC, BitMart, and PancakeSwap (V2), are among the top crypto exchanges, where you can buy safemoon.
With a background in journalism, Ritika Sharma has worked with many reputed media firms focusing on general news such as politics and crime. She joined The Coin Republic as a reporter for crypto, and found a great passion for cryptocurrency, Web3, NFTs and other digital assets. She spends a lot of time researching and delving deeper into these concepts around the clock, and is a strong advocate for women in STEM.
