- Safemoon, a brand new digital token launched in March, has quickly captured the eye of crypto merchants.
- Searches for the brand new cryptocurrency this week peaked early on April 20, the day dogecoin was meant to soar to $1.
- “SafeMoon is much like dogecoin within the sense that it’s unclear what the utility of the mission is or shall be,” Ava Labs president John Wu advised Insider.
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April 20 was meant to be ‘Doge Day‘.
However as a substitute of seeing their favourite meme-based token rocket to $1, dogecoin lovers watched as chatter on social media coalesced round a lesser recognized coin: safemoon.
Safemoon launched in March and is up by roughly 2,000% in a month, in response to CoinGecko. Searches for the cryptocurrency this week peaked early on April 20, as momentum was meant to be constructing behind dogecoin. The coin climbed to a excessive of $0.00000904 at round 11 a.m. ET Wednesday, and continued its climb by 3% till the subsequent day, in response to CoinGecko.
To the dismay of dogecoin followers, in the meantime, the meme token slipped 18% Thursday after reaching a excessive of $0.42 and has continued to slip since, even dipping underneath $0.20 briefly on Friday.
Safemoon is a decentralized finance token launched in March 2021. Its tagline, in response to its website, is “Safemoon to the Moon!”, the same slogan trumpeted by dogecoin followers. “To the moon” has been spouted by celebrities including Elon Musk, a vocal supporter of dogecoin who has been recognized to push the token larger along with his inscrutable tweets.
“Safemoon is much like dogecoin within the sense that it’s unclear what the utility of the mission is or shall be,” John Wu, president of Ava Labs, the group behind altcoin avalanche, advised Insider.
He continued: “Worst case, this can be a rip-off or Ponzi scheme. Higher case, this was a euphoric rally pushed by TikTok and different viral advertising engines.”
Nevertheless, not like dogecoin and different cryptocurrencies, safemoon encourages traders to carry. On its web site, it mentioned holders will earn passive rewards by means of “static reflection.” This implies the group behind safemoon plans to make the reward depending on the amount of the token being traded. Safemoon in truth costs these promoting it a ten% exit payment and distributes half that payment to different holders.
Ian Balina, founder and CEO of Token Metrics, a data-driven funding analysis platform for crypto, mentioned whereas there is not a lot to say about safemoon simply but, particularly with regards to its blockchain, its buying and selling quantity is getting some consideration.
“It is extremely well-liked on-line,” Balina advised Insider. “Individuals are simply taking over tokens identical to dogecoin based mostly on social media.”
The brand new cryptocurrency has gained traction on social media, TikTok particularly, with one video selling the coin garnering practically half 1,000,000 views.
Ben Weiss, CEO of CoinFlip, which supplies bitcoin ATMs throughout the US, mentioned safemoon has social-engineered its method into social media developments and constructed a neighborhood of hype and hypothesis round it.
“[Social media] has prompted it to rally and individuals are shopping for into the hype with out a lot data of safemoon utility or if they do not wish to miss out on the subsequent Dogecoin,” he advised Insider. “Since blockchain and cryptocurrencies are nonetheless so new and individuals are seeing loopy worth actions round them, it is no shock to see comparable initiatives like this that feed on hype.”
Listed below are what 5 different consultants consider the most recent craze sweeping the crypto market:
“Safemoon is one in all a lot of new cryptocurrencies showing in the marketplace which try to deal with a number of the issues that Bitcoin and different cryptos have that block mass adoption. For instance, Bitcoin is notoriously risky its valuation can fluctuate wildly from at some point to the subsequent and that makes it undesirable for day-to-day commerce or enterprise exercise. Safemoon’s exit payment is an try and create crypto with much less worth volatility and due to this fact extra utility in actual world purposes.” – Harold Montgomery, managing director at Wirex USA
“SafeMoon looks as if simply one other meme coin that’s driving retail FOMO into it. Safemoon’s built-in features search to penalize sellers of its token whereas rewarding holders. It costs sellers excessive transaction charges for promoting the token and pays a portion of that payment to holders. To classy merchants, this idea shouldn’t be enticing because it artificially inflates the worth within the quick time period with no clear profit for long-term holders. If the safemoon group comes up with a official innovation, it might probably profit from its artistic title and its branding.” – Kapil Rathi, co-founder & CEO at CrossTower
“With Ethereum transaction charges so excessive in latest weeks, herds of retail traders have began migrating in the direction of Binance Sensible Chain (BSC), a extra centralized competitor that is considerably cheaper to make use of (for now), albeit with a a lot much less mature developer ecosystem. On the similar time, TikTok has actually began to take off as a platform for crypto influencers, and a number of other of those influencers have began to direct their followers in the direction of new tokens on the BSC platform. Safemoon is one such instance of a brand new mission on BSC with untested tokenomics that depends on Ponzi-like mechanics that penalize sellers for promoting the token. It additionally seems to reward holders in mixture by giving them half of the sellers’ tokens by means of a shared liquidity pool, thus incentivizing them to not promote as a part of a “carrot and stick method.– Demetri Kofinas, creator and host of Hidden Forces, a weekly podcast
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“Regardless of its latest surge, it is very important level out that safemoon is comparatively new out there and traders have to weigh within the potential dangers earlier than buying safemoon tokens. Personally, I imagine it’s too quickly to go judgment on its success as its rising worth might simply be part of the development that is pushing dogecoin costs up … The corporate behind safemoon is nevertheless planning on launching its personal change by means of a $1 million funding, over half of which has already been raised. It is clear that they are heading for the large leagues like Coinbase the place they’re aiming to checklist themselves.” – Peter Jensen, CEO at RocketFuel Blockchain
“We take nice care when fascinated by what property to make accessible to our thousands and thousands of consumers world wide. Innovation within the crypto house is occurring at a breakneck tempo and it may be onerous to actually decide a top quality mission from a lower-quality mission if you do not have sufficient info. We urge everybody to teach themselves on cryptocurrencies earlier than investing, to ensure you’re utilizing a reliable buying and selling platform, and be cautious of something that appears too good to be true. For context, we don’t checklist SafeMoon.”- Jason Karsh, VP of selling at Blockchain.com