The blockchain ecosystem has seen more than 3,000 cryptocurrencies existing in this space. Among them is Safemoon, a digital currency that hit the niche in 2021. So, what is it, and what should you know about it?
Safemoon is a sprouting crypto project that brands itself as a DeFi (Decentralized Finance) digital token. What this means for investors is that the coin is somewhat an alternative financial option they can use on peer-to-peer networks. This crypto has been in the market since March 2021. Like other cryptocurrencies, no government or bank governs Safemoon.
At least two million investors traded Safemoon after its inception. The idea behind the name is to guarantee investors that they have a ‘safe’ venture. This way, the crypto is here to stay.
Unlike other cryptocurrencies, Safemoon operates on one principle ‘earn passive rewards for holding your tokens. It means that you receive profits for keeping your coins and instead of selling them, thus long-term.
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What makes Safemoon Unique?
Safemoon has three features:
- Reflection: this refers to the static rewards for investors. Unlike other cryptocurrencies where initial investors earn more rewards, Safemoon awards all its members for holding and not selling their tokens. Reflection is a feature that ensures investors are rewarded for depositing their tokens and not exchanging or selling them.
- LP Acquisition: it is Safemoon’s official liquidity network as per the white paper. Its importance is to ensure stability, creating stable pricing for all traders. Selling your tokens attracts a penalty. The reason for penalizing selling Safemoon is to prevent sudden price fluctuations. Every transaction results in a 5% fee -holders will receive a 5% share while the rest is for liquidity purposes. The LP acquisition aspect is to guarantee liquidity on Pancake Swaps and other exchanges.
- Manual burn: cryptocurrencies undergo burning to control circulation. The process is to make the cryptos scarce and consequently increase the coin’s value. Safemoon manually burns its tokens as a transparency approach for long-term investors.
Since Safemoon operates on Binance Smart Chain, the consensus mechanism is derived from proof-of-authority.
How Safe is Safemoon?
Many crypto investors hype over the new coin. This excitement raises the concern about its safety. Plus, the principle of rewarding traders for holding their coins and penalizing those who sell might be a venture you’d think twice about.
Safemoon is quite unique; people buy it as the price increases. Early investors are likely to earn more from it because selling is discouraged. Crypto analysts regard it as a scheme to lure more people into buying and later dumping it. And since many people find it frenzy, its price will drop sharply.
Like masternode coins and other cryptos, Safemoon is speculative. Its prices have been hovering since its introduction. Ideally, its safety is questionable.
If you want to own Safemoon, you should purchase BNB and exchange it on a platform that allows BSC exchanges. Safemoon is working on a wallet that will simplify transactions. However, everything else, including its stability, might take longer before ruling out the coin’s future.