How to Buy SafeMoon Crypto

SafeMoon was designed to reward long-term holders and charges sellers a 10% fee, with part of that fee going back to existing holders.1 First launched on the Build and Build (BNB) chain in March 2021, SafeMoon can now be bought on some exchanges such as Pancakeswap.

Though some may claim SafeMoon is resistant to manipulation, others note the dramatic volatility and fall of SafeMoon’s price in 2022 as potentially unusual trading behavior. Investors should conduct thorough research before making all investment decisions, including and especially those involve cryptocurrencies. 

KEY TAKEAWAYS

  • SafeMoon is a cryptocurrency launched in March 2021 with a unique tokenomics model that aims to reward holders and discourage short-term selling.
  • It employs a deflationary mechanism where a portion of each transaction is redistributed to existing holders, encouraging them to keep their tokens, which theoretically helps stabilize the price.
  • SafeMoon gained popularity due to its viral marketing and community-driven approach, attracting a large number of investors and enthusiasts.
  • Critics argue that the project lacks transparency and real-world utility, with some concerns raised about the sustainability of its tokenomics model.
  • As with any investment in the crypto space, potential investors should exercise caution, conduct thorough research, and be aware of the risks involved.

What Is SafeMoon?

Digital currencies are virtual assets, secured by cryptographic encryptions and powered by the distributed ledger technology known as the blockchain. Virtual currencies such as Bitcoin, Ethereum, and other stablecoins now serve as media of exchange globally. Investing in cryptocurrencies can be complicated since thousands of them exist but only a handful are real. As an investor, you should research the quality and realness of a coin before leaping.

Some distinct features of SafeMoon include the static reward where 50% of tokens from its transaction fees (usually 10%) are distributed to token holders, as well as the manual burn where the supply of SafeMoon tokens reduces to increase the price and demand. SafeMoon also has a self-sustaining liquidity pool that can siphon tokens in the form of fees, which are then added to the token’s liquidity pool on Pancakeswap.2 

In the past year, some celebrities have invested and endorsed SafeMoon. They include social media personality and professional boxer Jake Paul, with a YouTube channel of over 20 million subscribers, who has claimed that investing in SafeMoon can make everyone rich in the long run. Others are Brett Ratner and DJ Afrojack.3

Watcher Guru. “Complete List of Celebrities That Have Invested in Safemoon.”

Investing in cryptocurrencies, Decentralized Finance (DeFi), and other Initial Coin Offerings (ICOs) is highly risky and speculative, and the markets can be extremely volatile. Consult with a qualified professional before making any financial decisions. This article is not a recommendation by Investopedia or the writer to invest in cryptocurrencies nor can the accuracy or timeliness of the information be guaranteed.

SafeMoon vs. SafeMoon V2

SafeMoon launched an updated SafeMoon token in December 2021.4 The updated token consolidates the original version in a ratio of 1:1000 while ensuring transactions cost lower.

If you hold original SafeMoon tokens in a wallet and choose to switch them to SafeMoon V2, it can only be done manually. The switching process is quite easy. 

SafeMoon wallet users can update the app to the latest version and follow the instructions while those with other kinds of wallets can visit SafeMoon Swap to convert their tokens.

Additionally, if you hold your SafeMoon tokens on an exchange, you don’t have to switch to the V2 tokens. This is because the exchange handles the migration process and gives an update on the status of the process.

Compared to the original version, SafeMoon V2 processes transactions at a much lower cost. The V2 transaction fee is now 2% of the entire transaction.56

An alternative way of buying SafeMoon is to use the SafeMoon Swap decentralized application that is available on the Build and Build chain. This way you trade BNB tokens for SafeMoon tokens.

SafeMoon Fraud Allegations and Criticisms

It is important to note several allegations against SafeMoon as part of your research on deciding whether SafeMoon is the right investment for you.

In April 2022, Stephen “Coffeezilla” Findeisen accused the SafeMoon team of misappropriating millions of dollars. Findeisen found evidence of SafeMoon’s liquidity wallet moving funds to a wallet called the “Gabe (6abe) wallet,” which withdrew funds to a separate company run by John Karony. Thomas “Papa” Smith, former SafeMoon CTO, responded to Findeisen’s claims, stating that funds were taken from the “locked liquidity pool” before Karony’s appointment.7

In February 2022, a class-action lawsuit against SafeMoon was filed, alleging the company is a pump and dump scheme. Jake Paul, Nick Carter, Soulja Boy, Lil Yachty, and Ben Phillips were accused of promoting the SafeMoon token with misleading information. In May 2022, multiple SafeMoon investors filed another class action lawsuit for security fraud. The lawsuit was voluntarily terminated in November 2022.8

In December 2021, SafeMoon developed Version 2 of their token, SafeMoon V2, and set a deadline for token migration to avoid a 100% tax. They also introduced a decentralized exchange called “Safemoon Swap.” In April 2022, they introduced the Safemoon card, a 2.5% fee debit card for goods using SafeMoon and other cryptocurrencies. However, the card’s release has been delayed, causing criticism from experts.9

Advantages and Disadvantages of SafeMoon

Pros of SafeMoon

SafeMoon, like other cryptocurrencies, operates on decentralized blockchain technology. This means there is no central authority controlling or governing the network. Decentralization can enhance security, transparency, and censorship resistance, as no single entity has full control over the platform. Note that SafeMoon has received criticisms for manipulation, as even decentralized currencies can be controlled.

Part of SafeMoon’s transaction fee is added to the liquidity pool, which is essentially a smart contract holding a reserve of the token. This liquidity pool can provide stability to the token’s price by ensuring that there are funds available for trading even during periods of high volatility. The transaction fee that is distributed to existing token holders can incentivize people to hold their tokens. Long-term holders can benefit from increased token balances without having to actively participate in yield farming or staking.

While the primary focus of SafeMoon is not explicitly on yield farming or staking, the reflective tokenomics model can create opportunities for holders to earn passive income. Some users might choose to participate in yield farming on decentralized finance (DeFi) platforms that support SafeMoon or stake their tokens in protocols offering rewards.

Cons of SafeMoon

Despite several advantages, there remain a vast number of downsides to SafeMoon. The obvious downside of SafeMoon is the future public perception of the cryptocurrency. The success of SafeMoon, like many other cryptocurrencies, is heavily reliant on community sentiment. Because SafeMoon has faced several lawsuits and allegations of fraud, it remains to be seen whether the cryptocurrency will experience growth or strong user adoption in the future.

Cryptocurrencies, including SafeMoon, are known for their price volatility. Price fluctuations can occur rapidly and unpredictably, leading to significant gains for some investors but also substantial losses for others. This was most notably seen during the 2022 lawsuit filing when SafeMoon lost nearly all of its value.

Beyond speculative trading and holding for potential price appreciation, SafeMoon has limited practical use cases. Also, even though it has existed for several years, SafeMoon is a relatively new project compared to more established cryptocurrencies with undefined schedules and unproven roadmap execution.

Smaller cryptocurrencies like SafeMoon also might have limited liquidity compared to more established tokens. Though it does transmit some fees to liquidity pools, limited liquidity can make it difficult for holders to execute large trades at desired prices, making it possible but unprofitable to exist an investment position at times.

Last and perhaps most importantly, SafeMoon remains a speculative investment with an unproven business model that has yet to experience wide adoption. In certain contexts, SafeMoon may be seen as a “rug pull”, as many investors likely lost lots of money due to the legal ramifications of 2022. This is not to say future performance of SafeMoon may play out the same way; still, a downside of SafeMoon is the historical context of several price volatility leading to losses.

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