Home Business Is it a Rip-off? This You NEED To Know!!

Is it a Rip-off? This You NEED To Know!!

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SafeMoon is among the latest and fastest-growing altcoins, even within the loopy cryptocurrency market that’s seen a very good variety of tokens enhance in worth by hundreds and even tens of hundreds of % in 2021.

Launched on March 8, 2021, it’s a BEP20 token that exists on the Binance Sensible Chain. It’s additionally fairly uncommon in a world of cryptocurrencies making an attempt to scale back transaction charges to advertise buying and selling as a result of it truly taxes sellers, thus penalizing customers for buying and selling the token.

In some respects, it looks as if SafeMoon is following the identical strategy to cryptocurrencies that worth buyers like Warren Buffet and Charlie Munger take to shares. That’s to observe a purchase and maintain philosophy, the place those that maintain the longest obtain the best rewards.

Safemoon Overview
Featured Picture by way of Shutterstock

The event workforce hopes this strategy will assist cryptocurrencies transfer away from the wild west notion they at present have. Because it says on the SafeMoon Fb web page:

 Bear in mind, attending to the moon takes time, and the longer you maintain, the extra tokens you choose up.

With the prospect of infinitely rising token era (as long as you don’t promote), and with a worth that’s jumped hundreds of % in just below three months, and a novel tackle rewarding buyers, it’s no surprise the mission has attracted a great deal of consideration.

Likelihood is it’s caught your consideration too, which is why you’re right here. If you’re contemplating including SAFEMOON to your holdings, then learn on and be sure you take your grain of salt.

Do not forget that cryptocurrencies are inherently dangerous investments, even the oldest and most steady. New tasks like this will create new fortunes virtually in a single day, however they’ll simply as simply crash and burn. So be sure to by no means make investments greater than you’ll be able to lose and be sure you do your analysis and due diligence earlier than making any funding.

That mentioned, possibly you’re simply right here since you’ve heard the hype over SafeMoon and simply wish to be taught extra about what it’s and what downside it solves. If that’s the case, then learn on.

What’s SafeMoon?

SafeMoon is an altcoin created on the Binance Sensible Chain. It was launched on March 8, 2021, in a good launch the place the devs burned all their tokens and took part within the coin providing similar to everybody else. Within the quick time SafeMoon has been in existence, it has added practically 2.5 million customers to its protocol whereas burning over 40% of the overall token provide.

SafeMoon Home
SafeMoon has already burned practically half its provide. Picture by way of SafeMoon.internet

SafeMoon was created to deal with the difficulty of impermanent loss. As a further characteristic, it promotes shopping for and holding its token slightly than speculating to drive up the value. It does this by way of a “tax” on any transaction the place SAFEMOON tokens are offered.

One criticism of Bitcoin and related cryptocurrencies is that they’ve strayed from their goal. Initially created as a substitute for the centralized fiat currencies managed by central bankers, Bitcoin and lots of different cryptocurrencies have develop into little greater than commodities, with merchants, buyers, and speculators merely utilizing them as investments and tradable belongings.

Nevertheless, some critics have come ahead to assault SafeMoon, saying the token is a Ponzi scheme, a rip-off, and a shitcoin. That’s a critical accusation and one we’ll take a look at in additional element later on this piece.

What Downside does SafeMoon Tackle?

With the explosion of DeFi has come the issue of impermanent loss. As a result of so few buyers perceive the mechanisms that create impermanent loss, many have been sucked into the excessive APY yield-farming lure. It’s not shocking.

Seeing an APY of 100% or higher brings out the greed in most of us. However sadly, what inevitably occurs is the grasping dealer will get pushed out by early buyers who acquire their earnings and create the bursting of the valuation bubble.

SafeMoon
Three pillars of the protocol. Picture by way of SafeMoon.internet

As a consequence of this dynamic, the adoption of static rewards, often known as reflection, is gaining rising reputation. Reflection seeks to get rid of the issue of impermanent loss brought on by yield-farming.

And SafeMoon makes use of three easy features in every commerce to fight impermanent loss and create a greater protocol. These are Static Rewards (Reflection), Guide Token Burns, and Automated Liquidity Swimming pools.

Static Rewards

The SafeMoon builders really feel that utilizing static rewards, often known as a hold-farming mannequin, can resolve a number of issues related to yield-farming. For one factor, as a result of the reward quantity is conditional on the commerce quantity of the token, there’s a discount in promoting stress of the token brought on by early adopters promoting tokens after farming the insanely excessive APYs.

Secondly, the mechanism is an incentive for customers to proceed holding their tokens, thus amassing a fair higher variety of tokens, much like the way in which dividends work for stockholders.

The rewards work like a kind of auto-compounding that doesn’t require the person to actively hunt for yields, incurring transaction charges alongside the way in which. As well as, giant wallets with exchanges, dapps and many others., are excluded from getting the rewards, incentivising particular person pockets holders to contribute, thereby making the system extra decentralised and fewer vulnerable to whale exercise.

Guide Burns

Burns have been utilized by numerous protocols, and generally they’ll make a distinction, however not all the time. For instance, steady automated burns are likely to have a optimistic impression within the mission’s early days; nevertheless, the impact slowly loses its momentum because the burn can’t be managed to maximise its impression.

Against this, a burn managed by the workforce and based mostly on mission achievements will help preserve group engagement excessive and the impression on the token simply as excessive. As well as, Crypto communities recognize the transparency that comes with marketed burns that may be tracked.

SafeMoon has carried out a burn technique that’s meant to profit the group in the long run. That is achieved by distributing some rewards to a public burn deal with. The group is absolutely knowledgeable concerning the burns, and the overall quantity of tokens burned is all the time situated on the homepage of the SafeMoon web site, making it a easy job to determine the circulating provide always.

Celsius Inline

The burn charge is affected by “three vital components: reflection charge, token amount and market quantity.”, as talked about of their white paper.

Automated Liquidity Pool (LP)

The SafeMoon workforce calls the Automated Liquidity Swimming pools the “secret sauce” of SAFEMOON. What occurs is {that a} portion of the 5% charge from market exercise, primarily swaps and transfers, is captured in a wise contract. These tokens sit in their very own standalone pool. Because the tokens accumulate to a sure level, at present set at 500 billion tokens, they’ll mechanically get transformed again to the liquidity pool, thus making certain liquidity is flowing in by itself and never 100% reliant on liquidity suppliers. The workforce factors out that Automated LP gives two advantages to SAFEMOON holders.

The primary is that the sensible contract attracts tokens from consumers and sellers and provides them to the LP, thus making a ground for worth.

Secondly, the ten% tax on SAFEMOON gross sales acts as an arbitrage resistant mechanism that maintains SAFEMOON as a reward for holders, not as a speculative instrument.

Safely to the Moon

How protected is that this moon experience actually? Picture by way of SafeMoon.internet

Each of those features had been included to alleviate a few of the troubles seen with present DeFi reflection tokens.

SAFEMOON V2

Evolving from being a holding token primarily with the ten% tax for getting/promoting, V2 can whitelist sure contracts and modify the speed to 2%, which is useful for contracts with business use-cases.

This might encourage future partnerships with different tasks to view Safemoon as a utility token. The whitelisting capacity would additionally make Safemoon higher in a position to reply to sensible contracts threats, thus enhancing its safety measures.

As a result of decrease charges provided, the workforce tasks elevated quantity and demand for the token for its utilitarian profit.

Holders of the V1 token don’t must pay any charges emigrate their tokens to the V2 model. Nevertheless, they should guarantee they’ve enough BNB for the Binance blockchain to course of the transaction. The workforce encourages the migration of tokens by providing extra V2 tokens when migrating, primarily to make up for the charge proportion charged for the unique V2 purchase/promote order.

Extra particulars about how migration works in wallets and exchanges could be discovered right here.

SAFEMOON PRODUCTS

SAFEMOON Pockets

A key product of their lineup is the SafeMoon Pockets, out there on Android and iOS for each desktop and cellular. The app gives a selection of 12 or 24-word seed phrases for safety. The pockets means that you can maintain, swap and commerce numerous cryptocurrencies. It’s separated into three most important sections:

Overview – reveals you all of the crypto held within the pockets and the highest 100 currencies and their information. Click on on every forex to point out previous transactions. A helpful calculator lets you determine how a lot your crypto is value based mostly on market worth. You may also purchase crypto with Moonpay on the app or transfer between the Binance Sensible Chain (BSC) and the ETH community.

By permitting crypto to be despatched/acquired by way of QR code scanning, this setup has been designed, maybe, with the concept of constructing it straightforward for companies to combine them into their every day operations.

Rewards from holding SFM could be seen within the Reflections part of the app.

Swap – this part is the place you’ll be able to swap your tokens to/from Safemoon. There’s the power to regulate transaction pace transaction restrict time and set the slippage quantity to a degree you discover acceptable. Every swap carries a 0.25% charge damaged down as follows, in accordance with their weblog:

  • 0.17% going into the LP
  • 0.05% SafeMoon Ecosystem – the pool of money to pay for devs and maintenance of the SafeMoon mission
  • 0.03% Purchase and Burn Mechanically

Settings – that is the place you modify your password view your seed phrases and personal keys. 

Collectibles – though not official, this could possibly be the place NFTs are saved sooner or later at any time when they determine to launch it. Only a fast heads-up!

SafeMoon Wallet

Hodl your SFM within the Safemoon Pockets    Picture by way of Google Playstore

Mooncraft

Whereas not technically a product, Mooncraft is a mission that’s a part of the SafeMoon ecosystem, so I assumed it made sense to record it right here.

Mooncraft is predicated on the Minecraft idea. They’ve their very own server for gamers to log into, and you should buy in-game objects, much like what you’ll do in Minecraft. The web site at present works with PayPal to simply accept all types of fiat forex. By the way, the unique thought is about buying the objects with crypto. With the current announcement from PayPal saying that they is likely to be accepting crypto quickly, that might assist them advance their purpose of transacting in crypto. Nevertheless, how does that profit the SFM token?

One thought proposed was for a longtime firm like Riot Video games to combine with the SafeMoon ecosystem. This would possibly imply utilizing the SFM token within the steady of video games by Riot and one way or the other getting static rewards for it, thus creating a brand new use case for the token. Nevertheless, it’s fairly a sketchy thought in the meanwhile.

The thought for Mooncraft was first talked about throughout an AMA on Could 9, 2021, wherein the workforce mentioned that they had plans for a “group testbed” that Karony referred to as “a enjoyable, inclusive technique to incorporate the group with our testing of […] completely different applied sciences.”

The workforce added that they’ve created a server inside the Minecraft online game that shall be a part of this testbed and that extra particulars could be out there on Twitter and on the web chat platform Discord. The server shall be used to “stress check” new developments, together with non-fungible tokens (NFTs).

The best way NFTs work in Mooncraft is principally as skins for objects. These skins can be utilized inside completely different ranges. On this case, it’s having the ability to transfer backwards and forwards between the Alcatraz and Azkaban prisons. Undecided how a lot of a secondary worth the skins can have in an NFT market, or even when it’s tradeable proper now.

Coming Quickly

On the Product web page of the Safemoon website, there are two upcoming merchandise listed: a chilly pockets (hardware-based) and the SafeMoon change. Sadly, little information could be discovered on these.

SAFEMOON Tokenomics (SFM)

There was 1 quadrillion SAFEMOON tokens created at genesis, of which 223 trillion had been instantly burned by the builders. The remaining 777 trillion tokens had been launched to the group in a good launch occasion on DxSale. Since then, extra tokens have been burned, and as of Could 27, 2021, there are a complete of simply over 583 trillion tokens in circulation.

The SafeMoon protocol is exclusive in that every sale transaction has a ten% charge levied, which is supposed to incentivize holding slightly than promoting. The ten% charge is distributed as follows:

  • 4% charge = redistributed to all current holders
  • 3% charge is break up 50/50, half of which is offered by the contract into BNB, whereas the opposite half of the SAFEMOON tokens are paired mechanically with the beforehand talked about BNB and added as a liquidity pair on Pancake Swap.
  • 2% = despatched to Burn pockets to maintain the token deflationary.
  • 1%= SafeMoon Eco System to maintain the lights operating.
SafeMoon Protocol
Is it honest to tax customers for promoting and provides that tax to different holders? Picture by way of SafeMoon.internet

This mechanism has the crypto group calling the mission out as a Ponzi scheme because it rewards the early adopters and requires an increasing number of cash to circulate into the protocol to proceed rewarding those that be part of later.

In V2, they’ve adjusted the speed to be 2%, maybe with a watch on encouraging integrations with business enterprises. With the brand new charge, the breakdown is as follows:

  • 1% to all holders
  • 0.5% to the liquidity pool (for the SafeMoon/BNB pool, 0.25% for every token)
  • 0.5% to the SafeMoon Ecosystem – “preserve lights operating” charge

There isn’t any Burn pockets on this model of the tokenomics.

SAFEMOON Token Historical past

Since they underwent a swap from V1 to V2, what this chart reveals is mainly life after V2. From a low of $0.00142931 days after Christmas, it shot upwards to $0.00328754 in only one week, which is a 56% enhance. Even with the ten% tax in place, it was not sufficient to cease the unhurried descent of the value.

SafeMoon Token History

A unstable coin trending downwards    Picture by way of Coingecko.com

It’s been on a considerably light decline since its heyday, and whereas there could also be a number of spikes right here and there, it’s not sufficient to cease issues from going south. Nevertheless, not too long ago, there’s been a little bit of an uptick. After hitting $0.00098406 across the finish of February, it’s prefer it’s had sufficient of staying down and managed to yank itself off the bottom a bit, however not by a lot, resting at round 0.00118163.

It’s not positioning itself as a buying and selling token, however in the event you handle to get some low-cost sufficient, even with the two% tax, it’d nonetheless be sufficient to cowl prices and make a little bit of revenue.

Tips on how to purchase SafeMoon

There are a number of methods to purchase SafeMoon: by way of the SafeMoon pockets by way of swapping, a BSC-linked DeX corresponding to PancakeSwap and Bakery Swap, or different exchanges. The method is much like yield-farming, however it’s extra concerned than simply shopping for Bitcoin at Coinbase.

When shopping for with the BSC means, it’s worthwhile to buy Binance Coin (BNB) first after which deposit it to a pockets that helps the BSC. These embody MetaMask and Belief Pockets. Upon getting BNB, you go to the DEX and swap from BNB to SAFEMOON.

PancakeSwapSwap BNB for SAFEMOON on PancakeSwap. Picture by way of PancakeSwap

Beneath are a few of the exchanges that means that you can get your palms on some SafeMoon:

Exchanges For SafeMoon

Right here’s the place you may get some SFM tokens   Picture by way of SafeMoon

The SafeMoon Crew

The SafeMoon workforce stays small because the mission is new, however they wish to broaden that workforce as they transfer into the DEX and NFT areas sooner or later.

SafeMoon Team

The important thing personnel within the SafeMoon Crew    Picture by way of Safemoon.internet

The present CEO of SafeMoon is John Karony, an ex-analyst for the U.S. Division of Protection. He’s additionally the founding father of TANO, a newly created sport streaming platform. Nevertheless, he has no background in blockchain or finance.

Charles Karony, almost definitely associated to the CEO, is listed because the VP of Operations – Europe, based mostly in London since Oct 2021. If I assumed that John’s resume is flimsy, Charles is flimsier as SafeMoon is the one listed place on LinkedIn. Previous to this, he’d simply graduated from Brigham Younger College with a level in Monetary Economics.

Ryan Arriaga, the third member of the management workforce, is the International Head of Merchandise for the workforce. His resume might be probably the most stable of the three. A fast look on LinkedIn reveals that he’s fairly an entrepreneur, having began and offered 2 corporations, whereas a 3rd one had its license offered. Of all the businesses he’s labored for, the 2-year stint at Oracle stands out probably the most.

Aside from the three leads talked about, it’s also telling that there isn’t any CTO, and solely a handful of individuals listed within the SafeMoon LinkedIn website is on the tech facet. As a lot because it payments itself as a community-led initiative, key positions are nonetheless vital, particularly on the tech facet. The dearth of tech experience on this space is certainly an space of concern.

Is SafeMoon Protected?

The volatility of the cryptocurrency market is well-known, and judging by the prevailing worth motion of the SAFEMOON token, it’s no completely different. So those that are excited by investing can sit up for large positive factors over quick durations, and simply as large drops, normally much more quickly.

Whereas positive factors and losses are typical for any funding, the strikes seen in SafeMoon are really extreme. Along with that, the mission has been referred to as a Ponzi scheme by numerous individuals and a shitcoin by others. Nonetheless, others have simply referred to as it an outright rip-off.

Calling it a Ponzi scheme is correct because it follows a mannequin whereby the earnings made by early adopters are based mostly on others paying extra for the token at a later date. And the distribution of the promoting charge positively appears just like the pyramid type-structure you’d see in a Ponzi scheme.
That mentioned, it’s nonetheless potential to earn a living from SafeMoon as a dealer. Simply perceive what you’re moving into.

Safemoon Ponzi
A Ponzi remains to be a Ponzi. Picture by way of Twitter

SafeMoon has additionally been in contrast with BitConnect, a widely known crypto Ponzi scheme shut down in 2018 after two U.S. state securities regulators warned buyers of the similarity to a Ponzi scheme.

There have been different criticisms of SafeMoon based mostly on the founders locking away over 50% of its personal liquidity pool. There are claims that this might result in a “rug pull” by the builders.

It is a kind of exit rip-off the place liquidity is deliberately drained from the market, leaving these holding the token unable to promote. SafeMoon’s CEO John Karony claims that the liquidity is being held to maintain the token safer.

Is SafeMoon a Good Funding?

We’ve already mentioned the potential of SafeMoon being a Ponzi scheme, which ought to increase some purple flags and make you cautious over collaborating on this mission. Nevertheless, there’s another excuse to be cautious that was found extra not too long ago.

On Could 25, 2021, it was reported that the blockchain audit and consulting agency HashEx claimed it has found a dozen vulnerabilities in SafeMoon (SAFEMOON) which places greater than two million buyers in danger.

HashEx Audit
There’s greater than 1 downside with SafeMoon’s code. Picture by way of HashEx weblog

In accordance with their findings, the mission has a number of vulnerabilities that embody:

  • The sensible contract permits for setting the commissions for the switch of SAFEMOON as much as 100%;
  • Rug pulling, excluding holders from commissions distribution. A rug pull refers to liquidity theft by the developer;
  • Momentary blocking of token transfers;
  • Rendering token sensible contract completely inoperable.

HashEx claims that the Safemoon sensible contract proprietor is an externally owned account managed by a specific particular person.

The agency mentioned that this account has a market worth of $20 million, with the sum consistently rising because the sensible contract transfers a part of the switch commissions to the proprietor account.

If the proprietor’s deal with is compromised, a rug pull of over $20,000,000 can occur at any second. Furthermore, as a result of it’s about 15% of all liquidity held in liquidity swimming pools, the $SAFEMOON change charge can go down quickly.

HashEx mentioned that if SafeMoon’s exterior account is compromised, an attacker can drain the liquidity pool and stop SafeMoon builders from sending tokens to a burn deal with.

Ponzi Scheme
SafeMoon seems to exist solely to earn a living. Picture by way of Twitter.

The mixture of such important vulnerabilities in SafeMoon is a sobering reminder of the dangers that DeFi tasks nonetheless bear available on the market. Messari not too long ago reported {that a} complete of $285 million has been stolen attributable to DeFi hacks over the previous two years.

A current instance is the case of the DeFi100 decentralized finance protocol that’s being reported to have turned out to be a rip-off that ended with the theft of $32 million in person funds.

Newsletter Inline

Future Plans

Though there isn’t a roadmap per se for SafeMoon, there are some things the workforce is planning to implement within the close to and not-so-near future.

Swap and Evolve

At the moment, the mechanic is called Swap and Liquify (S&L). This works by setting apart a portion of SFM tokens from market exercise. Upon hitting a threshold, half of the tokens are swapped for BNB. Each are then paired in a liquidity pool for debtors. Nevertheless, they came upon that changing to BNB sends a unfavourable sign to the marketplace for the SFM token as a result of it appears like an enormous dump. So that they determined to do issues the opposite means spherical.

This entails them stocking up on BNB tokens as a substitute of SFM tokens beforehand. Upon hitting the agreed threshold, they’ll then convert the BNB tokens to SFM tokens, thus producing a purchase sign which gained’t spook the market however will as a substitute push the value greater attributable to perceived demand.

Technically, there’s nothing flawed with the mechanism, however this type of purchase sign could be deceptive to these unfamiliar with the mechanics.

ETA: unsure.

Operation Phoenix

Introduced as an initiative protecting numerous tasks, what is printed appears fairly formidable and in addition… ambiguous. Take the wind turbine mission, for instance. The workforce needs to decentralize turbine power know-how. Since nobody within the workforce appears to have any iota of a background on this area, why choose this one to work on? And the way? These questions aren’t actually addressed within the weblog piece.

One other mission talked about is acquiring an EU e-money license. This is step one to issuing a Protected Card, which I think about a sort of bank card. Earlier on, this was one thing that they had talked about working with Simplex on. As soon as this piece of the puzzle is in place, they’ll have the ability to launch SafeMoon Trade.

Studying about all this doesn’t make me really feel assured. If something, it raises much more questions that I don’t suppose I’m prone to get solutions to.

Sad Moon Man
Picture by way of Shutterstock

Conclusion

SafeMoon has undoubtedly made some individuals fairly wealthy in its first months of existence. In fact, that’s very enticing, however it’s also how all Ponzi schemes get began and construct momentum.

Individuals be taught of early adopters making 500% or 5,000% returns, and so they get excited and pour their cash into the scheme. Possibly it even retains going for years, however finally, all Ponzi schemes go bust.

Because it stands, SafeMoon has no utility apart from to earn a living. And that solely works if individuals stay excited and the token’s worth continues rising. Solely you’ll be able to determine if that’s a danger you’ll be able to afford to take. Since you might find yourself holding a bag of nugatory shitcoins.

Then again, the workforce has mentioned they’ve plans to supply utility to the platform. Linking it with on-line gaming might undoubtedly herald tens of tens of millions of recent customers, however understand that already well-established tasks are tackling the web gaming vertical.

There’s no lack of ambition for what they need the ecosystem to embody, what with a DEX, an NFT market, and even a chilly pockets, to not point out the various initiatives underneath Operation Phoenix. Nevertheless, given the workforce they’ve assembled thus far, I do have my reservations about how a lot of that may develop into a actuality. Additionally, how actively are they pursuing business entities to simply accept SFM of their every day operations?

After which there are the sensible contract vulnerabilities which were uncovered that definitely do level to the probability of a rug pull in some unspecified time in the future sooner or later.

Sure, you would possibly earn a living with SafeMoon, however you would possibly get burned as that rocket tries to shoot to the moon too. So watch out on the market, people.

Disclaimer: These are the author’s opinions and shouldn’t be thought-about funding recommendation. Readers ought to do their very own analysis.

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Cryptoenthusiast since 2020. Acquired concerned with crypto as a swing dealer and haven’t regarded again since. It’s a heady time to be concerned in crypto and there’s a lot potential forward for the trade.
When not doing crypto-related stuff, am completely happy to vege out doing modular origami whereas ogling at cute guys on Okay-dramas.


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