Are you concerned about what Safemoon is all about, is it legit or a scam? No worries, as in this article, we will be discussing Safemoon, is the platform a sincere scheme or not, things you should consider before making a commitment, and some amazing facts about them.
Safemoon Review, Is It Legit Or A Scam, How Does It Work?
What is SafeMoon?
SafeMoon is another altcoin, launched in the recent March 2021, on the Binance Smart Chain network. Just like everyone else following the lunching of this coin, developers burned all their tokens, to participate in the coin offerings. With regards to this, it is important to note that while burning over 40% of the total token supply, SafeMoon has secured about 2.5 million users to its protocol. However, to address the issue of impermanent loss, the altcoin was created with an additional feature that enhances it to buy and hold its token rather than speculating to drive up the price. SafeMoon has quickly risen, securing a sustainable position of the Binance’s third-largest token by market capitalization.
Some other cryptocurrencies are noted to have deviated from their main purpose, having become little more than commodities, with investors, traders, and speculators simply using them as tradable assets and investments which was originally meant to serve as an alternative to the centralized fiat currencies controlled by Bitcoin, central bankers and many other cryptocurrencies.
Following the critics of some people, against SafeMoon, saying the token is a shitcoin, Ponzi scheme and a scam, this is a serious accusation and in this article, we will take you through some detailed matter in this piece.
IS SAFEMOON LEGIT OR A SCAM?
With no addle, SafeMoon has been gaining serious attention this year, having risen quickly to secure a sustainable position of the Binance’s third-largest token by market capitalization. However, the question remains; is it a safe place to put your money?
This altcoin with regards to cryptocurrencies that seemed to be sprouting out of the ground at an alarming rate has shown many similarities to what happened in 2017.
Now to our focus area, varying sources had proven the fact that Safemoon is registered, regulated and licensed by a known government agency, known as a regulatory body.
Fast Facts:
In this section of the article, we have been able to compile a list of some facts about Safemoon, that you should consider, while making your decision.
- SafeMoon is another BEP-20 token, launched in the recent March 8 2021, on the Binance Smart Chain (BSC) ecosystem.
- Safemoon has secured a sustainable position of the Binance’s third-largest token by market capitalization.
- While utilizing a proof-of-authority as its consensus mechanism, SafeMoon is built on the Binance Smart Chain.
- Corresponding to the poof of authority, the block creators are notable as validators, chosen by Binance, to make the blockchain centralized.
- However, as a user of its platform, it is required that you trust Binance and rely on it for security, due to the centralization of the Binance Smart Chain.
- SafeMoon is built to have three core components:
However, while we discuss Safemoon, it is important to note that It adopts three core components, which are:
- Safemoon initiates a token burn that occurs on each trade
- The altcoin adopts a “reflection” where SafeMoon transactions are charged with a certain fee that gets distributed among holders of the token. Although, where the percentage of each transaction that gets burned is not clarified anywhere on their webpage.
But you need to note that transactions are taxed with a 10% fee, which is split into two equity.
Consider that 5% goes for the reflection rewards, alongside, 5% is meant to be for liquidity pools, however, 2.5% of the 5% that is sent to liquidity pools is therefore converted into Binance Coin (BNB) just to facilitate the liquidity of the SafeMoon and Binance Coin pair.
- The third is a fee charged on transactions, thereby giving to various liquidity pools on Pancake Swap and other similar platforms.
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Varying sources had proven that there was a mania of initial coin offerings, although seem hard to affirm if real or which ones were outright scams, but currently, there is the availability of over 10,000 different cryptocurrencies, all claiming new use cases.
What Problem does SafeMoon Address?
Following the creative lunching of Safemoon, in this section of the article, we will be discusing some of the problems that Safemoon addresses. These problems are included but are not limited to the following:
The problem of impermanent loss:
In each trade, SafeMoon adopts the utilization of three simple to combat impermanent loss, thereby creating a better protocol. These combat tools include the following; Manual Token Burns, Static Rewards also known to be Reflection, and Automatic Liquidity Pools
However, the adoption of static rewards, also known to be what is called reflection, seeks to eliminate the problem of impermanent loss caused by yield-farming, thereby gaining increasing popularity.
Static Rewards
Corresponding to the fact that the reward amount is conditional on the trade volume of the token and that there is a reduction in selling pressure of the token caused by early adopters selling tokens after farming the insanely high APYs, the SafeMoon developers feel that initiating static rewards would be an intelligent approach to the problems associated with yield-farming.
Manual Burns
With regards to the continuous automated burns, having a positive impact in the early days of the project, Burns has been used by several protocols, and sometimes they can make a difference, but not always. As the impact slowly loses its momentum since the burn can’t be controlled to maximize its impact.
By contrast, with the aim to help keep community engagement high, and the impact on the token just as high, a burn controlled by the team and based on project achievements can. However, it is important to note that Cypto communities appreciate and value the transparency that comes with trackable advertised burns. For customers’ long-term satisfaction, SafeMoon has adopted a sophisticated burn strategy.
Automatic Liquidity Pool (LP)
The Automatic Liquidity Pools project by the SafeMoon team as the “secret sauce” of SAFEMOON, envisage that this tool (Automatic LP) provides two benefits to SAFEMOON holders/traders.
- The attraction of tokens from buyers and sellers, thus adding them to the LP, create a floor for price.
- The initiation of the 10% tax on SAFEMOON. This tactic serves as an arbitrage resistant mechanism that maintains SAFEMOON as a reward for holders, not as a speculative tool.
These functions act to eradicate some problems that come with the DEFi reflection tokens.
Is SafeMoon Safe?
Following the fact that the crypto market is volatile, Safemoon is no different, while judging the price action. However, you are interested, it is cool to look forward to a rapid view for massive gains over short periods, and just as massive drops.
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Safemoon however, tends to be truly excessive when it comes to gains and losses for any investment. The project has been tagged to be a Ponzi scheme and shitcoin by various people, but it may be accurate if it is called a Ponzi scheme, following the fact that it has a model whereby profits made is based on payments from others that are paying more for the token, at a later date. with regards to this factual analysis, the distribution of the selling fee tends to look like the Ponzi scheme’s pyramid type structure.
More also, a varying source had proven that the SafeMoon has also been compared with BitConnect, which was shut down in 2018 after two U.S. state securities regulators warned and educates its investors of the similarity to a Ponzi scheme.
Conclusion
With no addle, it is clear that SafeMoon has made several people quite rich in its first months of existence. However, that’s very attractive, but you need to note that it’s how all Ponzi schemes get started and build momentum.
In this article, we’ve been able to bring to your idea, what Safemoon entails, and we sure to have answered your question “SAFEMOON REVIEW, IS IT LEGIT OR SCAM?” in addition to this, we believe by now, you know how Safemoon works, its features, how and what problems does it solve.
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