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SafeMoon is a protocol that hopes to expand the decentralized finance (DeFi) sphere. The project looks to create a fair and community driven token with many impacts, ranging from gaming to a decentralized exchange (DEX). It saw massive price increases in 2021 and many may be looking to speculate on the project.
However, potential investors should be well aware of the security procedures and risks associated with the token. Is SafeMoon safe? Learn more now.
How is SafeMoon Secured?
SafeMoon is a Binance Smart Chain (BSC) BEP-20 token. The BSC employs 21 validators on its proof of stake consensus model. The BSC also uses seed phrases to keep your crypto safe, similarly to other cryptocurrencies.
These are typically randomly generated sentences that are used as a form of password. Because of this, it can be very hard for individuals to have their SafeMoon stolen. SafeMoon is able to take advantage of some of the security from the BSC while creating its own safety procedures.
SafeMoon has a unique tokenomics system. Each transaction provides fees that power 3 main functions. The first is reflection. 5% is “reflected” back to the holders. 5% is also given to the liquidity provider to support transactions on exchanges. Lastly, a portion of all transactions is sent to a burn wallet, where funds are deleted to help support the value. This adds up to just over a 10% fee on all transactions.
This means you’ll instantly be down 10% when purchasing SafeMoon, and you’ll take another 10% loss when you sell the token. In order to make profit, the token will need to increase over 20% for you to break even.
Risks of Investing In SafeMoon
Perhaps the largest risk associated with a SafeMoon investment is volatility. SafeMoon fell over 90% in a week in 2021. Barstool Sports owner Dave Portonoy lost $33,000 of his $40,000 investment in August 2021.
Another risk of investing in SafeMoon is liquidity. The average volume is currently sitting around $50 million. This is much less than other tokens, so it may be difficult to sell in certain situations, such as a mass sell off.
SafeMoon may also be subject to a rug pull. Some estimate that over half of the existing SafeMoon liquidity is in the hands of the creators. These tokens could be sold off by the creators at any time, leaving holders with valueless tokens. While this has not happened with SafeMoon, it has happened with several other tokens, such as Floki Inu and UniCat.
Is SafeMoon Safe?
The SafeMoon team is very public, providing their names and social media profiles on the website. This is a good sign as it holds the developers accountable if anything goes wrong. It also improves the relationship between the developers and holders.
SafeMoon is also hoping to create its own DEX in the future. It plans to bring its tokenomics to a single platform, so holders can gain more rewards on a variety of different tokens.
However, this would further the amount of capital in the hands of the owners, making a rug pull more appealing. There is no set date for the release of the platform.
Keep an eye out for the release of the SafeMoon DEX. This may incentive investors to buy the token and impact the price.
Where To Invest In SafeMoon
SafeMoon is a relatively small project, so it is not listed on any centralized exchanges. Because of this, you will have to use a DEX to purchase SafeMoon.
Gate.io is a great option and supports the token. Once you create an account, you can connect your wallet and swap Wrapped Ethereum (WETH) for SAFEMOON. A wallet is a place to store crypto and is only accessible by the owner.
Pancakeswap is also a great option for the token and does not require an account. Simply connect your cryptocurrency wallet and begin trading.
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While SafeMoon has not directly been hacked, one owner reported that $1.3 million was stolen from their wallet. This is a risk that all SAFEMOON owners have. Because of this, you may want to consider a more secure wallet to ensure the safety of your investment.
Best Hardware Wallet For SafeMoon
Hardware wallets are a great option as they are physical devices that store the keys to the wallet. Without the physical device, the funds cannot be accessed.
Best Hardware Wallet: Ledger
Ledger is a hardware wallet brand that supports BEP-20 tokens through Ledger Live. There are currently 2 models of Ledger hardware wallets available. The Ledger Nano S is directed towards beginners and only offers necessary features. The Ledger Nano X is for more advanced users, offering more storage and up to 100 crypto apps.
Cryptocurrency Market Outlook
Towards the end of 2021, Facebook announced a corporate name change to Meta in order to show their focus on the Metaverse. This caused related tokens, such as Decentraland (MANA) to increase.
This is a huge step for the combination of institutions and crypto. Large businesses are hoping to incorporate crypto-related projects into their ecosystems. This may cause other businesses to take a further look into the uses of crypto.
Is SafeMoon a Safe Investment?
In terms of volatility, SafeMoon is an extremely high-risk investment. SafeMoon is a mostly speculative project without many use cases.
However, the developers are looking to change this by adding DeFi features. Without these features, it is very volatile and the price can drastically change at any moment. There is also a risk of a rug pull, as developers hold large amounts of the token. If you are willing to take on several risks in exchange for higher potential returns, a SafeMoon investment may work in your favor.