SafeMoon, a cryptocurrency that is surrounded by enormous hype, but that you may not read much about on the larger news websites. And that is not surprising. Many prominent figures within the crypto sector are looking at the project with suspicion. What is the reason for this mistrust of SafeMoon?
Safe to the moon?
SafeMoon is a relatively young cryptocurrency, or rather Decentralized Finance (DeFi token that is several months old. Despite the fact that the project is young, it attracts the attention of a large number of people, resulting in a huge inflow of new capital and high transaction volume. The value of the crypto thus increased in value by more than 900% in the past month. You would think a no-brainer to get in! Well, there are a number of things that concern me.
When we go to SafeMoon’s official website, it immediately reads “1,000,000 HOLDERS!” thrown in your face. And that is immediately my first problem with SafeMoon. The emphasis on both the website and the social media channels that support the project is almost entirely on buying and holding SafeMoon, and hype up possible quotes on crypto exchanges. In addition, people who want to sell their SafeMoon are “punished” with transaction costs of no less than 10%! For a more in-depth analysis of the fundamental factors behind SafeMoon, I recommend that you watch this video.
13 in a dozen
The value of the token is currently rising due to the massive influx of new investors hoping to make big profits. With promises on social media that SafeMoon will soon be listed on major exchanges, people are sweetened and the Fear-of-Missing-Out (FOMO) is fueled. And the greater the demand for SafeMoon, the higher the price. It is a constant cycle of promises and FOMO that increases demand and thus price. Until this cycle is interrupted by no more new investors coming in. At that point, many people will lose money.
And that is where the great danger lies. It is mainly novice investors who are vulnerable to this hype. They probably don’t know enough about the history of the crypto market (think of the BitConnect debacle) and crypto in general to be able to arm themselves against the big promises that are being made.
They probably also don’t know that there are tons of clones of SafeMoon, which itself is probably also a clone of yet another project. Copies almost identical to SafeMoon are SafeMars and SafeStar. And since anyone can launch their own DeFi token, there are bound to be many more such tokens in existence and on the way. Just take a look at this website, where you can compare projects. Under the heading “Similar Token Contracts” you will find a considerable laundry list. With many of these projects you will notice that they only differ by one or two lines in their codes.
Don’t get me wrong, if you like a risk and you were there early you could of course have earned a nice penny. However, for me it is the same as going to the casino. Crypto is so much more than that. There are projects that have clear use cases that can make the world a little better, supported by a large group of passionate developers. Such projects do not really need hype to get off the ground, as the (potential) usability of the technology does this by itself.
For example, look at Bitcoin (BTC, possibly the digital gold of the future. Or Ethereum (ETH) together with Cardano (ADA as platforms that can revolutionize all kinds of sectors and make the economy more inclusive. Do good research and use your common sense and you will come a long way!