SafeMoon is a cryptocurrency token that was created in early 2021 and is based on Binance's blockchain technology.
SafeMoon received celebrity endorsements from sports blogger David Portnoy, rapper Lil Yachty, and YouTuber Jake Paul throughout 2021. SafeMoon's value rose swiftly as a result of this, albeit it is now roughly 90% lower than it was at its height.
SafeMoon's biggest distinguishing feature is that it charges a 10% fee if you sell the token. In other words, if you sold $1,000 worth of SafeMoon, you would be charged a $100 fee. This is in addition to any costs owed to a cryptocurrency exchange for processing the transaction.
"The SafeMoon developers claim that this is done to encourage long-term holding by discouraging selling while rewarding coin holders," explains Shaun Heng, vice president of growth and operations at CoinMarketCap, a cryptocurrency price tracking website.
SafeMoon divides the proceeds from all sales fees 50 percent to current token holders in a "reflection" distribution. The remaining half of the fee is invested in a liquidity pool that SafeMoon employs to keep prices stable.
Aside from being a store of value, SafeMoon has no other specific use case. It does not support automated contracts or decentralized apps in the same way as Ethereum does.
SafeMoon and SafeMoon V2 are two different types of SafeMoon.
SafeMoon released SafeMoon V2 in December 2021, which is an upgraded version of the token. The new token intends to consolidate the existing version at a 1 to 1000 ratio while lowering transaction costs dramatically.
People who have original SafeMoon tokens in crypto wallets will not automatically have their funds converted to V2. SafeMoon tokens must be manually transferred to the V2 platform by wallet holders.
It's simple to change your holdings to V2. Users of SafeMoon Wallet should simply update to the current version of the app and follow the instructions for consolidating their accounts. To consolidate any other form of crypto wallet, go to the SafeMoon Swap website.
There's no need to do anything if you have SafeMoon tokens on an exchange; the exchanges will handle the migration and notify you when it's finished.
The new transaction charge for SafeMoon V2 is 2 percent. 50% of the fee is distributed to current token holders, as it was in the original version. The remaining 50% is split between the SafeMoon liquidity pool and the SafeMoon ecosystem's managers.
SafeMoon can be purchased in a variety of ways.
There are certain challenges to purchasing SafeMoon, the most significant of which being that the only way to pay for SafeMoon purchases is with other cryptocurrencies. Because it is not currently listed on any exchanges that take fiat currency, such as dollars, this is the case.
Another issue with SafeMoon is that major exchanges like CoinBase and Kraken do not offer SafeMoon trade. It's also not available on Robinhood or SoFi Invest, among other apps.
Use SafeMoon's patented SafeMoon Swap to exchange other cryptocurrencies, such as Binance Coin (BNB), for SafeMoon tokens. SafeMoon is supported by a few additional crypto exchanges.
If you don't already have crypto, you'll almost certainly need to open an account on another exchange that allows you to convert dollars to coins, as several of Forbes Advisor's top crypto exchanges do. After that, you'll need to withdraw the coins from the exchange, put them in a wallet, and then transfer them to a SafeMoon exchange.
disadvantages of purchasing SafeMoon
SafeMoon is a risky investment due to its extreme volatility, which means the price can swing substantially up and down. While this is true of any cryptocurrency, if you decide to sell SafeMoon, you will lose not just your investment, but also an additional 10% due to the selling charge.
Furthermore, SafeMoon is not suitable for regular trading because you must pay a significant price each time you sell. SafeMoon is also less liquid because it isn't listed on major exchanges, and converting it to cash is more difficult because it must first be converted to BNB.
According to Jeremy Britton, CFO of Boston Trading Co, a crypto investment fund, the fact that SafeMoon isn't listed on major exchanges is a huge red flag. "The exchanges conducted due diligence on the project and found it to be insufficient. He warns, "Ignore the experts at your peril."
Benefits of Purchasing SafeMoon
SafeMoon has the potential to go viral as a memecoin, and if it does, its value might soar to the moon, as its name suggests. Consider what happened with Dogecoin, for example: Because to word of mouth, the cryptocurrency's value increased by more than 200 times in a few months in 2021.
If you plan on owning SafeMoon for a long time, the reflections will benefit you because you will receive a piece of the fee paid when other people sell their tokens. This is a financial benefit that you won't get from most other popular cryptocurrencies, where you only profit if the price rises.
Furthermore, SafeMoon's latest SafeMoon 2.0 version reduced transaction fees, making it more desirable to exchanges and other use cases in the future.
Is SafeMoon a Good Investment?
SafeMoon is a high-risk, long-term investment, so make sure you have the courage to accept short-term losses before investing.
Even still, Britton is skeptical of SafeMoon as a long-term investment. "I would advise anyone thinking about SafeMoon to either flee screaming or perform some due research before running screaming," he says.
That isn't to say you should avoid cryptocurrency totally. "Rather than risking your money on a token that is difficult to buy and may become impossible to sell, choose a coin in the top 20, which is listed on all major exchanges, or a diversified crypto fund." It will be simple to exit your position when you need to sell, thanks to well-known names and good market liquidity," he explains.
If you do decide to purchase SafeMoon, make sure you only invest money that you can afford to lose.
0 Comments