The new SafeMoon cryptocurrency is a decentralised finance (DeFi) token that has quickly gained popularity on social media among investors looking for the next digital asset to take off in value.
What is this coin all about and how does it work? Can SafeMoon rival Dogecoin? This article gives you the details you need to know about the cryptocurrency before deciding whether or not to make an investment.
SafeMoon aims to reward “hodlers”
What is SafeMoon? Launched in March 2021, it is a DeFi token that runs on the SafeMoon protocol. DeFi tokens make use of smart contracts that run on blockchains like Ethereum to provide decentralised services. As of 2 July, there were more than 2.42 million holders of SafeMoon.
The name “SafeMoon” is a reference to the phrase “to the moon” used on social media by cryptocurrency traders who are bullish about the price of dogecoin.
How does SafeMoon work? The protocol is based on three functions, which it refers to as reflection, liquidity pool (LP) acquisition and burn, according to the official website. The reward mechanism for holding tokens reflects the volume traded to encourage holders to keep their tokens, known as “hodling” in the cryptocurrency market.
The contract adds tokens from sellers and buyers to the LP to create a price floor to support the SafeMoon value. The development team burns, or creates, tokens manually to control the supply in circulation.
What makes SafeMoon unique? Sales of the coin incur a 10% fee, which is redistributed:
What is next for SafeMoon?
SafeMoon is available to trade on the BitMart cryptocurrency trading platform, the Pancake Swap and Bakery Swap decentralised exchanges, and the WhiteBIT centralised exchange.
In May, SafeMoon launched on the LBank, Bitrue and BiKi exchanges. It is looking to launch on other exchanges, including Binance, Coinbase and Kraken, later this year. According to the 2021 roadmap posted on its website, SafeMoon plans to develop a non-fungible token (NFT) exchange, release a video game with the token integrated into the gameplay and develop charity projects.
The latest development is the adoption of blockchain bridges. SafeMoon is again trending on Twitter with the hashtag #SafeMoonBridges. But why should investors care?
Blockchain bridges are used by cryptocurrency developers to enhance interoperability. Through bridges investors will be able to transfer their tokens from the Binance smart chain to EOS or Ethereum for various use cases.
This announcement bodes well for the project’s sentiment, as SafeMoon is willing to dispel the infamous allegations of lack of real use or being a scam. The company also announced the arrival of their wallet, which is due in late July 2021.
Criticism of the SafeMoon project
Critics point to the token’s lack of utility. Presumably, bridging will help to expand the project’s use cases from being just a yield-farming token. For example, it could not only increase the trading volume by enabling ETH holders to buy SafeMoon, but also allow SafeMoon holders to use their tokens on various Ethereum decentralised applications, such as MakerDAO and Uniswap.
Another debating point is the project’s centralised risk. According to the project’s audit, conducted by CertiK, a blockchain company, which conducts security audits of other blockchain projects, SafeMoon owners accumulate a significant portion of the liquidity pool tokens, which eventually could pose the threat of centralisation.
Responding to this issue, the SafeMoon team said:
SafeMoon price analysis
The SafeMoon price exploded upwards between 17-20 April from $0.00000159 to a peak of $0.00001399 – a gain of 780% and a staggering growth of 69,850% since 12 March. The price then fell back by 70% to $0.00000421 on 22 April, with a traded volume of $191.6m.
While the price then moved up to $0.00000699 on 24 April, it followed the rest of the cryptocurrency markets lower, dropping to $0.00000381 on 1 May. It traded up to $0.00000982 on 15 May, a 157.7% gain in two weeks, but had slipped back to $0.00000385 by 24 May. At the time of writing, 2 July 2021, the coin was trading at $0.0000034.
Can the price recover from the sell-off? What do price predictions indicate about the value of SafeMoon in the long term?
SafeMoon price prediction: how high can the coin go?
The coin’s price is likely to rebound and trend higher in the coming years, although its value could remain at a fraction of a cent, according to the SafeMoon coin prediction from Digitalcoin.
The forecast from the site predicts the price will average $0.00000504 this year, rising to an average of $0.00000606 in 2022 and $0.00001025 by 2025. By 2028, the price could rise to a new peak and average $0.00001491, according to the forecast.
The SafeMoon crypto price prediction from algorithm-based site Wallet Investor is more bullish. It forecasts the price will rise from an average of $0.000004 at the start of August to a new high of $0.000014 by the end of 2021, $0.000028 at the end of 2022 and $0.000071 by the end of 2025.
The SafeMoon forecast from Coinpedia predicts the price will be roughly $0.00000662 at the end of 2021 and trade around $0.00000418 to $0.0000089 by the end of 2022. The website expects bullish momentum to carry the price to $0.00000957 and potentially as high as $0.0000192 by the end of 2025.
Keep following Capital.com to stay up to date with the latest SafeMoon news, price analysis and forecasts.
The total number of SafeMoon tokens created is a massive 1 quadrillion – that’s one thousand trillion, or 1 with 15 zeros. Of those, 777 trillion tokens were made available to the community at launch, while the remaining 223 trillion are held in the developer wallet.
If there is continued interest from cryptocurrency traders it could lift the SafeMoon price further. However, DeFi token prices are highly volatile and subject to large price swings. Some tokens see sharp price peaks and then fall back and the price does not recover as traders move on to other assets. This is known as “pump and dump”.
The price forecasts from cryptocurrency prediction sites indicate the SafeMoon price will remain at a fraction of a cent in the coming years. It is unlikely the price will reach 1 cent, as it would require the token to reach a market capitalisation of $1trn.
SafeMoon is a new token and relatively little is known about it and the development team behind it. You should do your own research to make an informed decision as to whether it is a good fit for your portfolio given your individual risk tolerance.
Buying SafeMoon crypto is more complex than buying other, better-known cryptocurrencies and tokens, as it is not listed on the main exchanges and requires a series of transfers across platforms. You can buy SafeMoon using US dollar stablecoin or BNB on BitMart, PancakeSwap, BakerySwap and WhiteBIT.
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