SafeMoon was one of the most popular meme coins that was launched in March 2021 on the Binance Smart Chain (BSC) network. The cryptocurrency follows a unique set of blockchain rules designed to provide a fair and equitable environment.
SafeMoon is a blockchain project that is designed to resist volatility by rewarding investors for holding their coins while levying 10% transaction fee to reduce trading activity. Here’s a more in-depth look at what you need to know about SafeMoon, how it works, its pros and cons and whether its a good choice for a cryptocurrency portfolio.
What Is SafeMoon?
SafeMoon is a cryptocurrency on the Binance Smart Chain that is known for its unique system of rewarding investors and discouraging sellers with an expensive 10% selling fee. The total value of all SafeMoon coins is around $1.7 billion at the time of writing, which is outside the top 200 cryptocurrencies by market capitalization. The blockchain project is currently running with its second major version, SafeMoon v2.
SafeMoon is easiest to buy, sell, and manage through a cryptocurrency wallet like MetaMask or TrustWallet, or SafeMoon’s dedicated software wallet. Individuals that hold SafeMoon on a compatible wallet can instantly swap the asset for other coins.
How Does SafeMoon Work?
SafeMoon is a cryptocurrency token that does not have its blockchain, contrary to popular currencies like Bitcoin and Ethereum. SafeMoon relies on the popular Binance Smart Chain, funded using Binance Coin (BNB). The core components that are involved with SafeMoon are minting and burning tokens, redistribution to existing owners and expensive selling fees.
- SafeMoon cryptonomics: SafeMoon uses a system of minting and burning tokens to encourage long-term holding. The main mechanisms are a redistribution of 4% of sales to existing holders, 3% added to liquidity pools for farming, 2% is burned and 1% added to a growth fund reinvested back in the community.
- Selling fees: Token holders that decide to sell their SafeMoon coins must pay a hefty 10% fee. This discourages heavy trading, promotes long-term holders of the token and funds the “cryptonomics” system as described above.
The SafeMoon protocol allows investors to earn additional tokens based on the number of coins they own. The unique properties of the coin entice long-term owners to realize the high effective interest rates of up to 80% APY and grow a portfolio over the long term. Compared to traditional assets, this is an attractive return on investment, however, does come with risks.
SafeMoon is managed by a small team focused on improving and expanding adoption. Here’s a snapshot of current products and announced products in development:
- SafeMoon Wallet: The official SafeMoon wallet is designed around the SafeMoon ecosystem. The wallet can be downloaded for iOS and Android devices to monitor the performance of the coins 24/7. The wallet can be used to store the coins with a fiat-to-crypto option available.
- SafeMoon Exchange (Future Release): The SafeMoon team has announced the development of a cryptocurrency trading platform to bring similar token economics to other currencies on the platform. The assets can be bought and sold using SafeMoon’s DeFi swap tool.
- Safemoon Hardware Wallet (Future Release): This announced hardware wallet will bring more security to SafeMoon tokens compared to the current SafeMoon mobile wallet. Cold store devices that feature offline storage from Internet-connected devices provide maximum security.
- Mooncraft: Mooncraft is a customized, private Minecraft gaming server designed by and for the SafeMoon community.
Is SafeMoon Safe?
SafeMoon, like other blockchain-based assets, uses a secure network that is purpose-designed for longevity. One of the most significant risks of smaller cryptocurrencies is the potential for “pump and dump” and other schemes. The SafeMoon protocol discourages extreme price manipulation with its “cryptonomics” rules and high sell fees that are built into the SafeMoon smart contract.
When considering investing in SafeMoon, it’s also essential to evaluate the safety and security of the underlying blockchain, Binance Smart Chain. BSC relies on a Proof-of-Stake consensus method called Proof of Staked Authority (or PoSA). This is a common and popular way to validate and verify transactions on the network by rewarding those that delegate their assets to the staking pool. Therefore, those with large holdings of Binance Coin (BNB) are given preference in validating new blocks and earning the staking rewards.
SafeMoon Pros & Cons
SafeMoon is a unique token that offers several pros and cons that need to be weighed up before investing. Its benefits include specific properties built into the smart contract that allows for price stability without pump and dumps. Investors that own Safemoon can earn additional tokens for holding long term within a supported wallet with returns up to 80% APY. Its disadvantages include limited support on centralized cryptocurrency exchanges, which can be more volatile and a low market cap at the time of writing.
- Designed for price stability: SafeMoon uses algorithms improving price stability and encouraging long-term holding.
- Compatible with any BSC wallet: SafeMoon works with the SafeMoon wallet alongside many other popular digital wallets.
- Potential for high yields: Investors may see returns as high as 80% when holding SafeMoon.
- Risk of losses: As with other digital currencies, SafeMoon is very risky. Investors should avoid investing more than they can afford to lose.
- Not a top digital asset: As a smaller asset with a smaller community, it is likely riskier and more volatile than widely-adopted currencies like Bitcoin and Ethereum.
Is SafeMoon A Good Investment?
Safemoon is an exciting prospect for long-term investors due to its unique metrics that reward holders with yields up to 80% APY. While there’s no guarantee on the future price of SafeMoon, the token had explosive growth when it was launched on the Binance Smart Chain (BSC) saw the price increase tenfold to a peak of $0.0000001194 in April 2021. Since then, the value of SafeMoon has been in a decline and has a current price of $0.000000938 and appears to be forming a base.
Update 11/2022: At the time of writing, the project has largely collapsed and is considered a failed cryptocurrency project. For a list of which cryptos have failed, read this article.
Where To Buy & Store SafeMoon?
SafeMoon initially launched on the Pancakeswap platform and grew in popularity and saw further listings on other popular cryptocurrency exchanges. The top exchanges in terms of trading volume that allow individuals to buy, trade, store and sell SafeMoon coins are listed below:
The token can also be exchanged using other coins near-instantly using SafeMoon's Swap platform on the official website. It works like other swap platforms by selecting the asset to swap with, entering the amount and connecting a BSC-supported wallet.
How To Buy SafeMoon?
To invest in SafeMoon, select a preferred cryptocurrency wallet and fund it with Binance Coin or another Binance Smart Chain asset to cover the purchase. For those that don't own BNB, it can be bought on a fiat-to-crypto exchange such as Binance, FTX, Gate.io and KuCoin. The coins can then be transferred to the crypto wallet that will be used to buy SafeMoon. There are even a number of crypto exchanges in Australia that still enable users to buy Safemoon.
To buy SafeMoon using the official app, follow these steps:
- Download and set up the SafeMoon wallet app: Download the free software wallet and create a public and private wallet key. This is used to send and receive the tokens and must always be kept secure. Anyone that has access to the keys can access the wallet and withdraw the tokens.
- Buy Binance Coin using the wallet: Fund the wallet using the BNB digital currency. Binance coin can be purchased directly within the SafeMoon wallet via a widget from MoonPay (which can have higher fees). A cheaper alternative is to use a trading platform such as Binance, Gate.io or FTX and transfer the tokens.
- Connect to a compatible exchange: Connect the BSC wallet, find the option to swap for SafeMoon, and set up a transaction. Because cryptocurrency transactions can’t be undone, it’s important to double-check the details. For those that don’t have a preferred exchange, there is the official platform at SafeMoon.net, which supports swapping for several popular currencies including BNB and Cardano (ADA).
- Enter your transaction: Click the submit button to send off the transaction. The SafeMoon coins will be displayed in the wallet once the transaction is confirmed on the blockchain network.
SafeMoon is a cryptocurrency token for long-term believers of the ecosystem that can earn additional tokens at the same time. The coin experienced a sudden price surge once the token metrics were understood to reduce selling pressure and generate yield. Since then, the market capitilization has been in decline and remains to be seen whether it will surge in popularity with the release of its exchange and hardware wallet.