- 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 venture is or will probably be,” Ava Labs president John Wu informed 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 identified coin: safemoon.
Safemoon launched in March and is up by roughly 2,000% in a month, in keeping with 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 keeping with 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 beneath $0.20 briefly on Friday.
Safemoon is a decentralized finance token launched in March 2021. Its tagline, in keeping with its web site, is “Safemoon to the Moon!”, an analogous slogan trumpeted by dogecoin followers. “To the moon” has been spouted by celebrities together with Elon Musk, a vocal supporter of dogecoin who has been identified to push the token greater together with his inscrutable tweets.
“Safemoon is much like dogecoin within the sense that it’s unclear what the utility of the venture is or will probably be,” John Wu, president of Ava Labs, the workforce behind altcoin avalanche, informed 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 and marketing engines.”
Nevertheless, in contrast to dogecoin and different cryptocurrencies, safemoon encourages traders to carry. On its web site, it stated holders will earn passive rewards by way of “static reflection.” This implies the workforce behind safemoon plans to make the reward depending on the quantity of the token being traded. Safemoon actually prices these promoting it a ten% exit charge and distributes half that charge to different holders.
Ian Balina, founder and CEO of Token Metrics, a data-driven funding analysis platform for crypto, stated whereas there is not a lot to say about safemoon simply but, particularly on the subject of its blockchain, its buying and selling quantity is getting some consideration.
“It is extremely in style on-line,” Balina informed Insider. “Individuals are simply taking on tokens identical to dogecoin primarily based on social media.”
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The brand new cryptocurrency has gained traction on social media, TikTok specifically, with one video selling the coin garnering practically half one million views.
Ben Weiss, CEO of CoinFlip, which offers bitcoin ATMs throughout the US, stated safemoon has social-engineered its manner into social media tendencies and constructed a group of hype and hypothesis round it.
“[Social media] has prompted it to rally and persons 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 informed Insider. “Since blockchain and cryptocurrencies are nonetheless so new and persons are seeing loopy value actions round them, it is no shock to see related tasks like this that feed on hype.”
Listed here are what 5 different specialists consider the most recent craze sweeping the crypto market:
“Safemoon is considered one of a variety of new cryptocurrencies showing available on the market which try to deal with a few of the issues that Bitcoin and different cryptos have that block mass adoption. For instance, Bitcoin is notoriously unstable 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 charge is an try and create crypto with much less value volatility and due to this fact extra utility in actual world purposes.” – Harold Montgomery, managing director at Wirex USA
“SafeMoon looks like simply one other meme coin that’s driving retail FOMO into it. Safemoon’s built-in capabilities search to penalize sellers of its token whereas rewarding holders. It prices sellers excessive transaction charges for promoting the token and pays a portion of that charge to holders. To stylish merchants, this idea will not be enticing because it artificially inflates the value within the quick time period and not using a clear profit for long-term holders. If the safemoon workforce comes up with a professional innovation, it may probably profit from its inventive identify 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 direction of Binance Good 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 identical 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 direction of new tokens on the BSC platform. Safemoon is one such instance of a brand new venture 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 combination by giving them half of the sellers’ tokens by way 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, you will need to 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 consider it’s too quickly to go judgment on its success as its rising worth may simply be part of the development that is pushing dogecoin costs up … The corporate behind safemoon is nonetheless planning on launching its personal change by way 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 record themselves.” – Peter Jensen, CEO at RocketFuel Blockchain
“We take nice care when serious about what belongings to make out there to our tens of millions of shoppers around the globe. Innovation within the crypto house is occurring at a breakneck tempo and it may be arduous to really decide a high quality venture from a lower-quality venture if you do not have sufficient data. We urge everybody to coach 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 record SafeMoon.”- Jason Karsh, VP of selling at Blockchain.com