In the world of crypto, going “to the moon” and having the price of tokens you hold skyrocket is every investor’s dream. However, one challenge with many altcoins is extreme price volatility. And when you throw in a variety of crypto scams and rug pulls, it can be risky to invest in various DeFi projects and tokens.
SafeMoon, a cryptocurrency on the Binance Smart Chain (BSC), is aiming to be different. With its own deflationary utility token and a decentralized exchange (DEX) on the horizon, SafeMoon has definitely made a splash in the crypto world.
But how do you buy SafeMoon? And, more importantly, is SafeMoon a good investment, or is this DeFi project nothing more than just another meme coin?
What Is SafeMoon?
SafeMoon is a community-driven DeFi project that began in March 2021. John Karony, a former analyst at the United States Department of Defense, founded SafeMoon with the goal of building new and beneficial blockchain, commerce, metaverse, and NFT products.
Currently, SafeMoon has its own crypto wallet for Android and iOS. A hardware wallet and SafeMoon exchange are also on the project roadmap. Recently, SafeMoon has upgraded to Version 2 (V2), which is essentially an upgrade to the original SafeMoon token to improve scalability and interoperability with other blockchain projects.
According to its white paper, SafeMoon’s main goal is trying to solve common problems other cryptos have relating to liquidity and mining rewards.
Mining equipment is often expensive and uses immense amounts of energy. As for exchanges, it’s often difficult for decentralized exchanges to provide enough liquidity to users. Furthermore, incentives developers use to encourage users to add liquidity to an exchange aren’t always worth it because of impermanent loss.
In contrast, SafeMoon uses smart contracts to automatically build liquidity and burn tokens to control the supply of circulating tokens. With these two methods, SafeMoon’s team believes it can help limit volatility other DeFi projects suffer from and also mitigate risks by ensuring liquidity.
How Does SafeMoon Work?
SafeMoon uses smart contracts to try and reduce volatility and ensure liquidity. To accomplish this, SafeMoon automatically charges a 10% transaction for every trade on its network. From there, four functions automatically occur:
- Reflections: SafeMoon distributes 4% of fees back to existing token holders.
- Liquidity Pool Acquisition: 3% of tokens are added to SafeMoon’s liquidity pool.
- Token Burn: SafeMoon burns 2% of tokens to help limit the circulating supply.
- Growth Fund: 1% of tokens contribute to SafeMoon’s Ecosystem Growth Fund.
Paying 10% in fees is incredibly steep, and this is how SafeMoon discourages users from swing trading or trying to pump and dump the coin.
Furthermore, through its static rewards structure, SafeMoon reliably pays tokens to stakeholders through reflections. Once again, this discourages selling since token holders reliably generate passive income with their crypto just by hodling.
Ultimately, this system of smart contracts and automatic burning, holder rewards, and liquidity acquisition is what makes SafeMoon unique.
How Do You Buy SafeMoon?
If you want to buy SafeMoon to diversify your cryptocurrency portfolio, you actually have plenty of options.
The method SafeMoon naturally promotes is to purchase SafeMoon through its own wallet.
Here’s how the process works:
- Download the free SafeMoon wallet for Android or iOS and back up your seed phrase.
- Purchase BNB through the wallet by using SafeMoon’s MoonPay integration.
- Swap your BNB tokens for SafeMoon tokens.
MoonPay lets you purchase popular cryptocurrencies with your debit or credit card, and overall, this is one of the simplest ways to buy SafeMoon.
Alternatively, you can buy SafeMoon by using different Decentralized Exchanges (DEXs). PancakeSwap and Gate.io are two popular options, although SafeMoon’s wallet or PancakeSwap are your two best options to purchase the token.
SafeMoon Price History
SafeMoon has had a tumultuous history since its launch despite aiming to be a deflationary token.
At launch, SafeMoon cost $0.0000000010 per token and had a supply of 777 trillion tokens. This sort of pricing is akin to meme-coins like Shiba Inu and Dogecoin, and it’s honestly difficult to conceptualize just how much SafeMoon you can acquire without spending much.
These days, SafeMoon is hovering around $0.000001274 per token according to CoinMarketCap and has a market cap of around $750 million.
If you had bought-into SafeMoon at launch, spending a few thousand dollars on the token would have made you a multi-millionaire.
This is especially true if you bought and hold until April 2021, during which time a slew of celebrity endorsements and general social media hype drove token prices up:
Within just a few months of launch, SafeMoon was making millionaires in a similar fashion to other meme-coins that caught traction on social media.
Since then, SafeMoon’s price has dropped considerably. Granted, the release of its wallet and continued endorsements from public figures like Barstool Sports founder David Portnoy propped up SafeMoon’s price at various points.
However, there’s no denying that the token has certainly fallen from grace since its historical high back in early 2021.
Is SafeMoon A Good Investment?
SafeMoon is still up from its initial token launch, but for now, the incredulous hype around the project has dropped off.
But is SafeMoon a good investment? Or is SafeMoon nothing more than another meme-token?
Well, the main criticism of this project has consistently been that SafeMoon doesn’t have any real world utility. In fact, skeptics have even called SafeMoon a Ponzi-scheme or rug pull.
When you consider that SafeMoon isn’t listed on any popular crypto exchanges like Coinbase or Binance, that’s another serious downside. After all, plenty of alternative cryptos like Chainlink, Polygon, and Solana get listed on major crypto exchanges.
This lack of a competitive advantage or obvious utility is the main red flag for SafeMoon. The token has proven it’s not immune to extreme price volatility, nor is it deflationary. Furthermore, while projects like Solana aim to challenge Ethereum’s scalability issues by processing more transactions per second, SafeMoon isn’t doing anything different aside from its 10% trading fee system that uses smart contracts.
Ultimately, this means investing in SafeMoon is extremely speculative. You can dabble in meme-coins or coins driven by social media if you want, but know that it’s a risky investment strategy and that you shouldn’t invest money you can’t afford to lose.
Whether you’re an advocate or doubter, there’s no denying that SafeMoon has had a wild ride since its inception in early 2021.
To its credit, SafeMoon is trying to be different from other cryptos. The 10% fee model that helps provide holder rewards, burning, and liquidity is certainly interesting. And the fact that SafeMoon has its own wallet and an exchange on the way are promising signs.
But at the end of the day, SafeMoon is a risky investment. And it’s not even the best way to earn passive income with your crypto.
These days, there are so many lucrative crypto savings accounts out there where you can generate interest with different tokens. BlockFi and Celsius are two popular examples, and you can purchase more established cryptos like Bitcoin, Ethereum, and Solana and generate yield with these tokens instead.
So, keep tabs on SafeMoon and consider dabbling in the token if you like risky altcoin investments. But for a long-term hold, you’re probably better off looking elsewhere.
Tom Blake is a personal finance writer with a passion for making money online, cryptocurrency and NFTs, investing, and the gig economy.
Editor: Robert Farrington