- 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 just like dogecoin within the sense that it’s unclear what the utility of the challenge is or might be,” Ava Labs president John Wu instructed 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 fanatics watched as chatter on social media coalesced round a lesser recognized coin: safemoon.
Safemoon launched in March and is up by roughly 2,000% in a month, based on 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, based on 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, based on its website, is “Safemoon to the Moon!”, an identical slogan trumpeted by dogecoin followers. “To the moon” has been spouted by celebrities including Elon Musk, a vocal supporter of dogecoin who has been recognized to push the token increased along with his inscrutable tweets.
“Safemoon is just like dogecoin within the sense that it’s unclear what the utility of the challenge is or might be,” John Wu, president of Ava Labs, the crew behind altcoin avalanche, instructed 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 engines.”
Nevertheless, not like dogecoin and different cryptocurrencies, safemoon encourages traders to carry. On its web site, it mentioned holders will earn passive rewards by means of “static reflection.” This implies the crew behind safemoon plans to make the reward depending on the amount of the token being traded. Safemoon the truth is costs these promoting it a ten% exit price and distributes half that price to different holders.
Ian Balina, founder and CEO of Token Metrics, a data-driven funding analysis platform for crypto, mentioned whereas there is not a lot to say about safemoon simply but, particularly relating to its blockchain, its buying and selling quantity is getting some consideration.
“It is vitally common on-line,” Balina instructed Insider. “Persons are simply taking on tokens identical to dogecoin based mostly on social media.”
The brand new cryptocurrency has gained traction on social media, TikTok particularly, with one video selling the coin garnering almost half 1,000,000 views.
Ben Weiss, CEO of CoinFlip, which gives bitcoin ATMs throughout the US, mentioned safemoon has social-engineered its approach into social media tendencies and constructed a group of hype and hypothesis round it.
“[Social media] has brought on it to rally and persons are shopping for into the hype with out a lot data of safemoon utility or if they do not need to miss out on the subsequent Dogecoin,” he instructed Insider. “Since blockchain and cryptocurrencies are nonetheless so new and persons are seeing loopy value actions round them, it is no shock to see comparable tasks like this that feed on hype.”
Listed below are what 5 different consultants consider the most recent craze sweeping the crypto market:
“Safemoon is one in every of a variety of new cryptocurrencies showing in the marketplace which try to handle a number of the issues that Bitcoin and different cryptos have that block mass adoption. For instance, Bitcoin is notoriously unstable its valuation can range wildly from at some point to the subsequent and that makes it undesirable for day-to-day commerce or enterprise exercise. Safemoon’s exit price is an try to 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 as if 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 costs sellers excessive transaction charges for promoting the token and pays a portion of that price to holders. To classy merchants, this idea shouldn’t be engaging because it artificially inflates the worth within the quick time period with out a clear profit for long-term holders. If the safemoon crew comes up with a authentic innovation, it might probably profit from its inventive title 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 challenge 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 mixture by giving them half of the sellers’ tokens by means 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 available in the market and traders have to weigh within the potential dangers earlier than buying safemoon tokens. Personally, I consider it’s too quickly to move judgment on its success as its rising worth might simply be part of the pattern that is pushing dogecoin costs up … The corporate behind safemoon is nevertheless planning on launching its personal change by means 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 fascinated by what belongings to make out there to our tens of millions of shoppers around the globe. Innovation within the crypto area is going on at a breakneck tempo and it may be onerous to really choose a top quality challenge from a lower-quality challenge if you do not have sufficient info. We urge everybody to teach 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 promoting at Blockchain.com