In this article the author Nicole Willing discusses what safeMoon is, how it works and what kind of investor it rewards.
A token that pays interest on decentralized finance (DeFi) began 2022 with a bang, although SafeMoon’s price is 21% off its recent high.
A community-focused DeFi token, Safemoon was launched in March 2021 to compete with meme cryptocurrencies such as Dogecoin (DOGE) and Shiba Inu (SHIB). The Safemoon Army, as it is called, has acquired a substantial following, much like the other memes.
Its migration to version 2 is now complete and, says Safemoon offers several advantages.
What is safemoon and how does it work? What pushed the price higher in recent weeks and what is the outlook for the coin?
Safemoon aims to reward ‘hodlers’
The name safemoon is a reference to the phrase “to the moon” used on social media by cryptocurrency traders who are bullish about the price of dogecoin.
How does safemoon work? The cryptocurrency is a yield-farming DeFi token that runs the SafeMoon protocol on the Binance Smart Chain (BSC). Yield farming is a process by which crypto investors are rewarded with interest payments in the form of extra tokens, in much the same way as a bank pays interest or a stock pays dividends. DeFi tokens make use of smart contracts that run on blockchains to provide decentralised services.
The protocol is based on three functions, which it refers to as reflection, liquidity pool (LP) acquisition and burn, according to the official website. The reward mechanism for holding safemoon tokens reflects the volume traded to encourage holders to keep their tokens, known as ‘hodling’ in the cryptocurrency market.
The contract adds tokens from sellers and buyers to the LP to create a price floor to support safemoon’s value. The development team burns, or destroys, tokens manually to control the supply in circulation.
What makes safemoon unique? Purchases and sales of the coin incur a 10% fee, which is redistributed as follows:
Safemoon updates attract investor interest
The safemoon price spiked by as much as 46,533% from the launch to peak at $0.00001399 on 20 April. The price then dropped back to $0.00000361 on 2 May, before rebounding to $0.00001039 on 15 May. But the crypto markets started selling off sharply towards the end of May and the price declined over the summer to $0.0000015 on 18 August.
The safemoon value started to rise toward the end of August ahead of the planned launch of its software wallet along with Android and iOS apps. However, the wallet launch was delayed on 28 August because of technical issues, sending the price down from $0.00000354 to $0.00000281. The price continued to fall in September, reaching $0.00000119 on 10 September.
The Android version of the SafeMoon Wallet launched on 13 September, supporting an uptick in the price to $0.000001853 by 15 September. The developers opened up the beta version of the iOS app on 30 September while waiting for App Store approval.
The price today (14 January) is $0.000002121.
On 3 October, the developers indicated an updated roadmap for the safemoon crypto. This includes Version 2 of the coin, which has a new total supply of one trillion, and a coin burn that will have 575 billion coins in circulation. According to the updated safemoon news posted on 13 October, the new version has a lower fee to enable the use of safemoon for commerce, but the 10% fee will still apply to day trades. The token consoidation is 1000:1.
On 12 December CEO John Garony tweeted that V2 was live adding there were some “new features in the wallet”.
The new version of the coin could provide an opportunity for the developers to address the 12 flaws that blockchain security firm Certik found in its security audit of safemoon in April. There was an additional critical risk surrounding the accumulation of liquidity tokens that Certik has since marked as resolved.
The updated safemoon roadmap also includes card, exchange and blockchain launches scheduled for this year, while the launch of a hard wallet has been delayed to 2022 “to focus on wallet development”.
On 6 November the company tweeted there have been 600,000 downloads of the SafeMoon Wallet apps for Android and iOS. It added there were 2.9 million safemoon holders. The apps will launch more swap pairs for ether and BSC coins. On 14 October, the SafeMoon Wallet added an option to buy BNB coin, the native cryptocurrency of Binance’s platform, which was banned in the UK earlier this year, and convert it to safemoon.
The safemoon price has been trending higher in response to the updates. The potential prospect of a reduction in circulating coin supply and expanded usage could provide support for the crypto’s adoption. Where do forecasts suggest the coin price could move next?
Safemoon price prediction: Does the coin have a future?
At the time of writing, 5 January, the safemoon crypto price prediction from DigitalCoin projected that the coin could trade at an average price of $0.00000356 in 2022, rising to an average of $0.00000414 in 2023 and $0.0000055 in 2025. By 2028, DigitalCoin suggested safemoon could average $0.00000892.
In contrast, Price Prediction estimated there was potential for the safemoon price to move up to its previous high later in the decade. It forecasted that the price could average $0.0000027 in 2022, and then rise to $0.0000085 in 2025, reaching $0.0000555 by 2030.
What is not clear from the safemoon website is what value the coin or the organisation offer apart from being a vehicle for speculative investment. There is talk about the social media channels of a project called Operation Phoenix supposedly an internet of things project connecting wind turbines in The Gambia to bring wider access to the internet. “It creates a functional way to burn Safemoon while providing a stable cryptocurrency for the county,” says one commentator on Reddit.
The company’s main commentary on Operation Phoenix is in a YouTube video. It seems unclear what part, if any, the cryptocurrency plays.
It’s important to keep in mind that cryptocurrency markets are extremely volatile, making it difficult to accurately predict what a coin’s price will be in a few hours, and even harder to give long-term estimates. As such, analysts can and do get their predictions wrong.
We recommend that you always do your own research, and consider the latest market trends, news, technical and fundamental analysis, and expert opinion before making any investment decision. And never invest more than you can afford to lose.
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Disclaimer: The information provided on this page does not constitute investment advice, financial advice, trading advice, or any other sort of advice and it should not be treated as such. This content is the opinion of a third party and this site does not recommend that any specific cryptocurrency should be bought, sold, or held, or that any crypto investment should be made. The Crypto market is high-risk, with high-risk and unproven projects. Readers should do their own research and consult a professional financial advisor before making any investment decisions