Cryptocurrency has the same number of users as the internet did in the late 90s. Just like the dot-com bubble, it’s likely that many smaller cryptocurrency projects won’t last in the long term – especially projects with unverified teams that have yet to deliver on their promises. Likely, one of these small projects is SafeMoon, a token on Binance Smart Chain (BSC). This doesn’t mean it is never a good idea to buy it, it just is unlikely to survive in the long-term.
Cryptocurrency investors coined the term “shitcoin” to describe crypto assets with either no justifiable value or no utility. More and more useless coins are being made on Binance Smart Chain, as these tokens are easy to produce, and Binance’s blockchain attracts many retail investors due to its low transaction fees. For these reasons, TikTok influencers have been showing off SafeMoon to their followers, pumping the price of the crypto asset.
What is Safemoon?
SafeMoon is among the 1st cryptocurrencies on Binance Smart Chain to gain mainstream attention. Most of this attention has been gained from social media platforms, namely Twitter and TikTok. It’s also 1 of the 1st cryptos to implement redistribution tokenomics, something which has yet to be proven as a viable framework for cryptocurrencies.
If you visit SafeMoon’s website, you’ll be greeted by a plethora of crypto-related buzzwords. Terms like “Static Rewards” are used to hide the token’s resemblance to a pyramid scheme. These “static rewards” increase the amount of SafeMoon investors own based on how long they hold their investment.
To fund this, SafeMoon charges investors a 5% fee to simply sell their tokens. This keeps investors from selling their investment, even if SafeMoon doesn’t provide any real value. This 5% fee is burned, redistributed and added to the SafeMoon liquidity pool on PancakeSwap. Unfortunately for SafeMoon holders, this effect is usually negligible, especially after the 5% fee is incurred when selling the tokens. More on this can be read in the SafeMoon whitepaper.
Since tokens are redistributed proportionally to the amount of SafeMoon token one holds, those with the most tokens earn the most money. Since large holders make a significant amount of money each day, they’re incentivized to sell their rewards and lock in profits. Conversely, smaller holders make pennies each day, and they’re incentivized to hold these rewards in hopes of growing their base number of tokens.
SafeMoon classifies itself as a decentralized finance (DeFi) token. However, for well-versed cryptocurrency enthusiasts, it’s hard to consider anything on Binance Smart Chain as a DeFi token. Even though BSC is essentially Ethereum but with a few tweaks, it suffers from a huge lack of decentralization. One of the major tweaks it made from the Ethereum code was it only has 21 nodes validating transaction compared to the 10s of thousands of validators on Ethereum. To be a Binance Smart Chain validator, investors must stake millions of dollars of BNB. With such a high cost to be part of the network, the network is controlled by a few well off Binance Coin holders, including people involved with Binance directly.
Dave Portnoy’s SafeMoon Endorsement
Calling these highly speculative, pyramid-scheme-esque cryptocurrencies “shitcoins” doesn’t explain the complete nature of these investments. Instead, “Tik Tok Tokens” better describes the nature of these assets. With Tik Tok influencers promoting cryptocurrencies like SafeMoon, much of this newfound traction can be attributed to SafeMoon’s social media promotions.
As of May 17 2021, Dave Portnoy, founder of Barstool Sports, has voiced his allegiance to SafeMoon. He announced his support on Twitter, encouraging his followers to buy Safemoon. Admitting that he doesn’t really know what SafeMoon is, Portnoy told his followers: “If it is a ponzi [scheme], get in on the ground floor.” This proved to be terrible advice. It turns out SafeMoon was far from being on the ground floor – the token is currently trading for a tiny fraction of what it was back then.
The reason some investors think they’re early investors in SafeMoon is its low token price. SafeMoon can be bought for far under a penny, leading some to think there’s lots of room for the cryptocurrency to grow. However, it’s almost impossible for SafeMoon to reach a penny, much less a dollar. This is because of the immense amount of tokens minted; the initial supply was 1 quadrillion tokens. Don’t fall for price bias – if you’re new to crypto, you may want to stick to Bitcoin or Ethereum.
Brief History of Safemoon
SafeMoon has only been trading for about 3 months, and it’s appreciated more than the S&P 500 over the last decade. The token began trading in March for $0.000000001 before skyrocketing to an all-time high of over $0.000013. To put these gains in perspective, an investor who bought $100 of SafeMoon tokens at $0.000000001 would have had $130,000 at SafeMoon’s peak. These prices seem extremely low compared to current prices due to the V2 migration described below
Although SafeMoon has a relatively small market capitalization, the token price is a bit misleading. There’s a current max supply of over 585 trillion tokens, so there are far more coins in supply than other cryptocurrencies like Bitcoin (with a 21 million max supply) and Ethereum (with a current supply of 115 million). With so many tokens in circulation, it’s essentially impossible for SafeMoon to ever reach $1, like some investors suggest. To reach this price target, SafeMoon would need a market capitalization about 600 times the size of Bitcoin’s.
SafeMoon (SAFEMOON) recently upgraded to SafeMoon V2 (SFM) by migrating to a new smart contract. There is now a 100% reflection fee on SAFEMOON (V1), making the token effectively worthless. This will incentivize holders to upgrade to 2.0, however, it is concerning that the team was able change the original contract. What would stop them from making V2 effectively worthless as well? There are certainly a lot of risks for a token with “safe” in the name.
Can SafeMoon Reach $1?
Some investors have calculated that it would take more than all the money in the United States to bring SafeMoon anywhere close to $1 per token.
How to Buy Safemoon (SAFEMOON)
- Open a Binance account.
Since SafeMoon is a new and controversial cryptocurrency token, many popular exchanges like Coinbase and Gemini don’t support the asset on their platforms. Due to this, you will likely have to buy BNB (the native token of BSC) from a major exchange and swap it for Safemoon. Luckily, Binance, the largest crypto exchange in the world makes it easier.
You’ll need to make a Binance account to use the platform’s decentralized exchange, PancakeSwap. Creating an account with Binance is easy; you just need to provide an email address and create a password. Depending on where you live, you may have to provide additional information before you’re approved to begin trading.
Once you’re approved to trade, you’ll need to purchase Binance Coin (BNB). Since you’ll eventually be swapping these tokens for SafeMoon, you should buy as much BNB as you wish to invest in SafeMoon.
Remember, names can be deceiving –– there’s a good chance you’ll end up losing close to your entire investment if you decide to invest in pump-and-dump Tik Tok Tokens. While cryptocurrencies like DOGE and SafeMoon could make you a quick buck, they aren’t regarded as viable investments for the long term.
- Download Metamask Wallet.
Most cryptocurrency users who interact with decentralized exchanges (DEXs) use MetaMask wallet, as its Google Chrome extension makes it easy to use with other programs on your PC. To set up your wallet to be compatible with BSC, you’ll need to choose “Custom RFP” from the drop down tab in the upper right hand corner of the screen. You can then set up your wallet by providing the following information:
Once your wallet is set up with Binance Smart Chain, you can send your BNB tokens to your wallet. Once these tokens are in your wallet, you can use the bridge feature on PancakeSwap to enable your tokens to work with BSC.
- Buy a hardware wallet (optional).
Since you’ll need to use a software wallet to connect to PancakeSwap, your crypto assets are much more secure than if you were to store your cryptocurrency on a centralized exchange. However, software wallets can still be hacked, so you may want to consider other storage solutions.
Best Hardware Wallet: SafePal S1
Hardware wallets are physical devices that store your cryptocurrency offline. This way, it’s impossible for your cryptocurrency to be hacked. Since Binance Smart Chain is a relatively new blockchain, there aren’t many hardware wallets on the market that support BEP-20 tokens like SafeMoon.
- Make your purchase.
Luckily, buying SafeMoon is much easier than setting up your crypto wallets to interact with PancakeSwap. If Tik Tokers can figure it out, then it can’t be too hard, right?
PancakeSwap is an Automated Market Maker (AMM), meaning that it uses mathematical equations to calculate token prices instead of centralized order books. All you need to do is choose SafeMoon token, and you’ll be able to swap the tokens in your wallet for SafeMoon.
Pancakeswap’s biggest benefit over other DEXs are its low transaction fees; you’ll likely pay less than $1 to process your transaction. However, these low fees come at the cost of centralization; while it’s an attractive short term solution, the small number of validators on Binance’s blockchain raise security concerns.
If you’ve ever used Uniswap, then Pancakeswap should look familiar. While they operate in similar ways, Uniswap is the leading decentralized exchange on Ethereum, while Pancakeswap is the leading DEX on Binance Smart Chain.
Cryptocurrency Wallets for Binance Smart Chain
Now that you know how to buy Safemoon you should also learn how to store your Safemoon and other cryptos safely with a personal wallet.
Best Hardware Wallet for SafeMoon: Ellipal Titan
The Ellipal Titan is a multicurrency wallet that can support over 7,000 different cryptocurrencies. More likely than not, the Ellipal Titan will be the only hardware wallet you’ll ever need. The hardware wallet offers a sleek, touch screen interface that lets you easily view your portfolio directly on the hardware wallet.
Also, Ellipal has a software wallet you can download on the app store. The software wallet works alongside the hardware wallet, and it lets you trade cryptocurrencies directly from your application. The Ellipal Titan is currently $30 off on the company’s website, making it a bargain considering all the premium features. If you’re serious about investing in crypto, a hardware wallet is a must.
Best Software Wallet: Exodus
Exodus wallet is a free software wallet that helps investors store, earn interest, and use their digital assets in practical ways. It’s available on both desktop and mobile, and Exodus has several apps integrated in its wallet that makes using your digital assets easy. The wallet supports major cryptocurrencies like Bitcoin, Ethereum and Dogecoin, as well as 150+ other digital assets. Unlike most software wallets, Exodus also allows investors to buy and sell cryptocurrency directly from their wallet.
Staking Crypto + Earning Rewards
After DOGE pumped well over 10,000%, investors are now paying attention to the worst coins on the market, referred to as shitcoins. Shitcoins are fundamentally bad investments, but that doesn’t mean there isn’t money to be made in them. Just look at Dogecoin’s $60+ billion market cap!
Leverage Your Investment & Avoid Capital Gains with BlockFi
BlockFi is a cryptocurrency lending service that lets investors leverage their capital or earn interest on a crypto savings account. With talks of an increased capital gains tax, collateralizing your cryptocurrency to receive a loan is a great way to take profits from your investment without needing to pay capital gains.
Some investors use BlockFi to leverage their investment positions. Since you’ll receive your collateralized cryptocurrency back once you pay back your loan, there’s potential to profit from investments made from your loan as well as the appreciation of your collateralized crypto.
However, if you default on your loan, your cryptocurrency will be used to pay it back. If that happens, you’ll also be required to pay capital gains tax on the collateralized crypto.
For investors who aren’t looking to take on extra risk, BlockFi offers interest bearing cryptocurrency accounts. Simply make an account, deposit your crypto and start earning up to 10% annual interest on your crypto holdings.
Current Crypto Prices
The cryptocurrency markets have started out 2022 in a downtrend, yet many investors are bullish on the asset class over the long-term. Buying dips and dollar cost averaging into positions has been a great strategy for many crypto investors. This way, you can average into your positions during dips to lower your cost basis. For the most up to date cryptocurrency prices, check out our crypto pricing table below.
How To Secure Your Privacy While Trading SafeMoon
Smart TVs, Playstation, Xbox
Many cryptocurrency traders value their privacy, and a public IP address can expose one’s location, as well as other pertinent information. Moreover, some countries will block the usage of their platforms based on a users’ location, leaving traders without the tools they need. A common solution that adds a level of privacy and security for crypto traders are VPNs. VPNs allow you to mask your IP address and set your location to a desired country. Far and long, ExpressVPN is the best VPN for traders, as it supports extremely high speeds and connects automatically upon receiving internet connection to avoid revealing your IP address. Try ExpressVPN today through Benzinga, and receive 3 months for free!
Is SafeMoon a Good Investment?
Getting in early in any cryptocurrency can be an appealing way to get rich quickly. However, most small cryptocurrencies don’t end up pumping like DOGE or SafeMoon, so your money may be more stable in more established, large cryptocurrencies. However, keep in mind getting into any cryptocurrency can be quite volatile with Bitcoin down 13% in the past year and Ethereum down 3%, SafeMoon’s risk-adjust reward is likely sub-optimal being down 96% in the past year.
Frequently Asked Questions
Questions & Answers
While SafeMoon isn’t definitively scamming investors, it’s tokenomics resemble a pyramid scheme. Pyramid schemes accrue value from additional investors buying in, and without this SafeMoon would fail. Plus, those at the top of the pyramid scheme make much more than those who buy in late. Investors with large amounts of SafeMoon reap huge daily rewards which they can sell on the market to lock in their profits.
Why do I get an error on PancakeSwap?
There are plenty of reasons you got an error on PancakeSwap, but the most common error when investing in SafeMoon is that your slippage tolerance is too low. Since the token taxes investors when they buy, sell or transact SafeMoon tokens, you’ll need to increase your slippage tolerance to 10% or more to successfully swap your tokens on PancakeSwap.
This news is republished from another source. You can check the original article here.