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Safemoon is a memecoin, and its protocol paved the way for an entire new generation of shitcoins. While the price of Safemoon is at a fraction of a cent, it has the eyes of millions of investors. Can Safemoon keep this momentum going? Or will the “bubble” inevitably burst?
What is Safemoon?
Safemoon is a decentralized token on the Binance blockchain, referred to as a BEP-20 token. What makes Safemoon unique is its “tokenomics” function for every transaction — Reflection LP Acquisition and Burn. With every Safemoon transaction there is a 10% fee, where 5% is reflected back to all holders and the other 5% is burned, limiting the supply of the token.
Safemoons auto-liquidity generating protocol seems very rewarding for investors, as it rewards farms automatically without having to stake the token. Although this comes at a large cost: all transactions, including selling, will require a 10% fee to the owner. This makes it the most beneficial for early adaptors, where new investors will not receive anywhere near the same returns.
Safemoon Market Capitalization
The current market cap of Safemoon is roughly $2.5 billion, currently trading around $0.000004 per Safemoon token. In May 2021 Safmoon rallied to all-time highs of $0.000009, which would put the market cap at double its current value. This is a relatively large market cap for such a low price per token. If price climbed 3 zeros to $0.004, the market cap would be $2.6 trillion, far surpassing the market cap of Bitcoin.
Can Safemoon Hit $0.01?
Theoretically over decades, there is the possibility that Safemoon burns enough tokens to reach $0.01 if volume and transactions continue at a constant rate. Although, in a practical sense there is absolutely no chance Safemoon will reach $0.01. The market cap would never grow to the extent to be able to support the price. Memecoins like this are built to lure investors with false hopes and empty promises to sound more appealing.
This doesn’t necessarily mean that there isn’t room for growth within the project, there is still the possibility of large growth, although a price target of $0.01 is completely unrealistic. Considering investors get punished for using the token, it is hard to imagine SafeMoon growing to that scale.
How to Buy Safemoon
There are many different options when it comes to purchasing altcoins like Safemoon. You can purchase Safemoon by using a decentralized exchange like PancakeSwap to swap another crypto for Safemoon. To use PancakeSwap, you’ll need a cryptocurrency in a crypto wallet connected to Binance Smart Chain. Good places to onboard cash to crypto are Coinbase, Binance, eToro and Voyager. A decentralized exchange is a great alternative for traders looking to avoid fiat, or wish to exchange a different altcoin.
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Is Safemoon a Bubble?
Like most memecoins, Safemoon is absolutely a bubble. This is due to the fact that there is not necessarily any reason that price is moving, it is completely speculation. Price rallys and grows at exponential rates which is not sustainable, eventually leading to a very dramatic decrease in price.
Safemoon has over 1 million follows on Twitter, as well as a very large community following. Considering most of the community holds Safemoon without actively trading it due to the 10% fee, this could lead to liquidity issues, eventually causing the bubble to “burst.”
What are Memecoins?
Memecoins would be cryptocurrencies that derive from social media or cultural references. These types of coins are made to gain popularity fast, without necessarily having utility. Memecoins do not have any revolutionary protocols, they rely on jokes and cultural references to attract investors. It is important to consider that memecoins are extremely risky assets, if you are looking to invest in a memecoin do not invest more than you are willing to lose.
Is Safemoon a Good Investment?
If you are looking to take a risk and diversify your portfolio with a popular memecoin, then Safemoon may be a great option for you. If you are looking to invest in revolutionary blockchain projects that will shape the future of DeFi, then Safemoon may not be a great investment for you. Keep in mind that memecoins are the most volatile assets you can invest in, make sure to never invest more than you can afford to lose.
This news is republished from another source. You can check the original article here.