Safemoon is a cryptocurrency that launched in March 2021 and attracted attention after its price soared in April of that time. It has since lost basically all of its value, falling nearly 99 percent since its April 2021 peak. It was designed to award long- term holders and charges merchandisers a 10 percent figure, with part of that figure going back to being holders.
How does Safemoon work?
The safe moon is a cryptocurrency, which are digital currencies that live solely online and hope to be used as a medium of exchange. Like further popular cryptocurrencies similar to Bitcoin and Ethereum, Safemoon is powered by the distributed tally technology known as the blockchain. The safe moon was created on the Binance Smart Chain blockchain and has a request cap of only about$88.4 a million( as of July 7, 2022), compared to about$ 396 billion for Bitcoin.
The safe moon was designed in a way to encourage long-term investment and discourage selling, but it has failed to catch on after its original shaft. It does this by charging merchandisers a 10 percent figure, with half of the figure going to Safemoon’s holders and the other half to be used in a liquidity pool, in trouble to maintain price stability.
Blockchain security establishment CertiK set up during an inspection of Safemoon that its possessors acquire commemoratives created from the liquidity pool, giving them control over commemoratives created as part of the figure. CertiK flagged this as a major issue in its report and recommended that Safemoon ameliorate its security features.
Safemoon’s inventors also manually reduce the quantum of Safemoon in rotation regularly in trouble to reduce force and increase the price. The price did soar shortly after being introduced in March, reaching an each-time high of$0.000014 on April 20, 2021, according to CoinMarketCap. It has since fallen nearly 99 percent from its peak.
Risks to consider
Like nearly all cryptocurrencies, Safemoon is an extremely academic asset with no natural value. You should be prepared for the possibility of losing your entire investment if you choose to buy Safemoon. Then are some other pitfalls to consider.
Volatility: Since it was introduced, the price of Safemoon has been extremely unpredictable, rising further than,000 percent before tumbling nearly 99 percent. Because utmost cryptocurrencies have no beginning value, your return is grounded on what you can vend it for to someone different.
Regulation: Cryptocurrencies are relatively new, and governments are just beginning to understand what they’re and what their impact could be. China was forceful in its response, banning cryptocurrencies in 2021 due to the fiscal pitfalls they pose and the academic trading they created. Regulation could also come in the form of advanced duty rates on cryptocurrency earnings. Check out Bankrate’s cryptocurrency levies companion to learn about introductory duty rules for Bitcoin, Ethereum, and further.
Academic bubble While bubbles are more fluently seen with hindsight, there are signs that cryptocurrencies were part of an academic delirium. The name Safemoon itself seems to have been chosen to subsidize the current mania by conveying an asset that’s both safe and “ going to the moon, ” rather than having a real beginning purpose. This should be a red flag to serious investors.
Liquidity: For dealers looking to get in or out of Safemoon snappily, the fact that the currency’s authors discourage dealing through a 10 percent figure could make liquidity a challenge. also, Safemoon doesn’t trade on the major crypto exchanges but rather is bought and ended on the hotcake exchange, which allows trading in numerous cryptocurrencies.
Safemoon is a cryptocurrency that was designed to encourage long- term investment and discourage selling, but it’s an extremely unpredictable asset that comes with a number of other pitfalls too. Those who buy this kind of parlous asset should be prepared to lose their entire investment.