Safemoon is a relatively new cryptocurrency, launched in March 2021. The coin is based on the Binance blockchain created by Binance to support BNB.  

Despite being such a new coin, Safemoon has seen its popularity shot through the roof. This is because a number of celebrities publicly endorsed the crypto in a short span of time. These celebrities weren’t limited to any particular domain. 

For example, the endorsements include YouTuber Logan Paul, former Backstreet Boys member Nick Carter, rapper Lil’ Yachty, and sports blogger Dave Portnoy. Safemoon saw a surge and the coin price hit a high of $0.00001375 in April 2021 before falling to $0.000002868 in May 2021 during the 2021 cryptocurrency crash. So, what’s so special about Safemoon?

Understanding the problem statement

SafeMoon’s white paper identifies a very specific problem plaguing the DeFi industry.  It states that new entrants in the cryptocurrency space don’t have easy access to the high APYLP-farms. APY or Annual Percentage Yield is the amount of interest you earn when you lend out a cryptocurrency. 

When a new decentralized finance project begins, the idea is to give out free tokens to incentivize people to use the new platform and offer feedback. To get the tokens, the project may require sending existing crypto tokens such as BTC or ETH. This is called staking.  

Subsequently, the holding period and the number of stake currencies are calculated and free tokens are offered based on the same. Usually, a user needs to pay a fee to get their tokens i.e. harvest them from these sites called ‘farms’. 

The creators of SafeMoon intend to leverage the idea of a system of static rewards. So the tokens rewarded would be dependent on the volume of the token being traded. This would remove any price volatility arising purely out of the sales of tokens earned as rewards. 

The white paper also adds that the ‘reflect mechanism’ has the additional incentive for SafeMoon holders to not sell the token. This is because of the way the SafeMoon protocol is designed. 

For example, if you decide to sell your SafeMoon tokens, you are charged a fee of 10%! That means you would just receive 90% of the value of the tokens sold. 5% of that fee is redistributed among all the token holders at that time. 

This means that for every transaction, the seller is punished while investors who hold on to their tokens are rewarded. The other 5% is further split up with half being sold by the contract into BNB while the other half is getting automatically paired to a Pancake swap in the form of a liquidity pair.

How Is the SafeMoon Network Secured? The SafeMoon white paper has the following plan for the safety of its protocol: the developer burned all tokens in the Dev Wallet before launch, there was a fair launch on DxSale, the LP is locked on DxLocker for four years, and an LP is generated with every trade, locking on PancakeSwap.

Tokens in circulation and safety

As we saw above, the inherent structure of SafeMoon incentivizes participants to transact less and hold more which lends stability to the price of the coin. Participants transact less and those who are holding the coin tend to do so for a long period of time. 

Both these factors make the price stable and the coin scarce, thus lending support to its price. These unique features make SafeMoon relatively safer in a world full of highly volatile crypto tokens.

The SafeMoon white paper describes the following when it comes to the number of coins in existence: a total supply of 1,000,000,000,000,000, with 223,000,000,000,000 burned dev tokens and a fair launch supply of 777,000,000,000,000. 

The market cap of SafeMoon at the time of writing is $1.95 billion. While this is much lower as compared to other mainstream cryptocurrencies, one must remember that SafeMoon was launched just a few months ago and is gaining momentum.

Coming to the coin’s internal security, the token was audited by the firm CertiK. CertiK awarded a score of 82 points out of 100 to SafeMoon based on its audit report. It further stated that there were no critical issues identified during the audit. 

Although, there was one flag raised in regards to the lack of control of owners of the SafeMoon project on the tokens that are funded by the SafeMoon’s seller fee that we discussed above. The SafeMoon team was quick to respond to this particular issue, stating that the token is governed by a central board that is subject to the existing governmental laws and regulations. 

They further reiterated that they are a legally registered entity and hence are bound by all the rules applicable to them. SafeMoon CTO, Thomas Smith went on to state that his team is aware of certain issues and there are safeguards in place in order to alleviate the risks arising out of the same.

What lies ahead for SafeMoon?

The price of SafeMoon is currently at $0.000003373 and has been stable for over 3 weeks now. As can be seen in the below chart, the price has shown the potential to see sharp rises over time. The declines too haven’t been very steep as SafeCoin by design promotes price stability and disincentivizes sellers which at times also saved a lot of them from early exits. 

Safemoon chart

What’s more, the hashtag #safemoonsqueeze has been trending for the past few days promoted by a post on r/SatoshiStreetBets – a crypto subreddit inspired by the infamous r/WallStreetBets. 

The movement intends to build a massive sustained upward pressure on the price due to community and campaign-driven volume-induced token burn.  So it’s not the typical short squeeze but rather a campaign to prove the naysayers wrong when it comes to the success of SafeMoon.

All in all, SafeMoon is a revolutionary new coin and might offer an opportunity to make great returns for early investors.