This coin could follow in Dogecoin’s footsteps

SafeMoon: This coin could follow in Dogecoin’s footsteps

SafeMoon has gained a lot of ground in the last 24 hours. The coin is very popular on Reddit and some are already wondering if SafeMoon is the new Dogecoin – but what exactly is behind the project?

SafeMoon is a community project that was recently launched on the Binance Smart Chain (BSC). On 2 March, it was possible to purchase the SafeMoon token via DxSale.Network. Since then, the token has been Profit Secret tradable on various exchanges, with the decentralised exchange (DEX) PancakeSwap being the exchange with the highest liquidity.

In total, the cryptocurrency has 1,000,000,000,000 tokens (one quadrillion), which is an extremely high token supply. However, in order to strengthen the trust of the users, the developers already destroyed 223 billion tokens.

In addition, the number of tokens is regularly reduced automatically by a built-in smart contract mechanism. For every transaction a user carries out with SafeMoon, a share of 11 per cent is burned. This means that these tokens disappear permanently, which leads to a steady reduction of the SafeMoon token supply.

There are also penalties for token holders who sell their SafeMoon

This penalty consists of a 10 percent fee that traders have to pay for the sale of SAFEMOON tokens. What is special about this is that this fee goes back to the SafeMoon token holders and the SafeMoon/BNB liquidity pool on PancakeSwap. Through all these integrated features, the SafeMoon development team aims to support the token’s course and generate sustainable growth for the project.

According to bscscan.com, the project had just 1,000 token holders as of 8 March. At the time of going to press, this number has grown to over 43,099 hodlers. In the same period, the cryptocurrency’s price has risen by over 800 per cent. Due to these developments, the BSC token has experienced enormous hype in recent days and a large community has formed on Reddit that actively promotes the coin in several groups – some are even already comparing the coin to Dogecoin (DOGE) on Reddit. Even though the hype around SafeMoon might just be starting, there are definitely big risks.
SafeMoon the new Dogecoin or scam?

SafeMoon has an extremely interesting token model overall, but it is primarily aimed at generating hype – hodlers are rewarded and sellers are punished. The project does not yet deliver any real economic added value. Therefore, the price is currently driven primarily by the community and the attention the project receives in the crypto space.

In addition, the development team behind SafeMoon is anonymous and only legitimises itself through its rules laid down in the smart contract. But no external party has yet checked and verified the code of the SafeMoon protocol. For this reason, one should be extremely cautious about SafeMoon. On the BSC, there have already been multi-million scams by anonymous development teams in the past.

Per se, however, it cannot be said that an anonymous team is a bad sign for a crypto project. Well-known DeFi projects, such as SushiSwap, often have this as well. In general, one can see that anonymous teams are increasingly developing projects from the decentralised financial sector (DeFi) – presumably also due to regulatory concerns. Nevertheless, in such projects that are considered „legitimate“, the code is always checked by various external teams that enjoy a good reputation in the crypto space. This is to prevent fraud and improve the general reputation of a project within the community. If SafeMoon wants to spark a similar hype as its role model Dogecoin, the project should think about such trust-building measures as soon as possible.