SafeMoon has garnered considerable attention this year, but is it really a secure location to save your funds?
This crypto bull run bears many parallels to the 2017 run-up. During that period, it seemed as if cryptocurrencies were growing out of the ground at an accelerating rate.
- SafeMoon is a BEP-20 coin that was released on March 8, 2021, on the Binance Smart Chain (BSC) ecosystem.
- SafeMoon is composed of three primary components:
- The first is a “reflection” fee applied to SafeMoon transactions that is paid to token holders;
- The second is a cost applied to transactions that is allocated to different liquidity pools on Pancake Swap and other platforms;
- The third is a token burn that happens on each trade.
- SafeMoon is based on the Binance Smart Chain, which employs a consensus method based on proof-of-authority.
- In authority proofs, the block creators are referred to as validators.
- Since Binance pre-approves and selects these validators, the blockchain becomes centralized.
- Because of the centralized nature of the Binance Smart Chain, users of its platform must trust Binance and depend on it for security.
Initial coin offers were a craze, and it was difficult to distinguish which projects were legitimate and which were blatant frauds. Today, there are around 10,000 distinct cryptocurrencies, each with its own set of potential applications.
With the current Dogecoin mania, many cryptos appeared that seemed to be completely fabricated. Siba Inu, Akita Inu, Dogelon, and others. They all seemed to be profiting on Dogecoin’s success via investments in meme culture, but how about SafeMoon? Is it attempting the same thing or is it a serious endeavor?
What exactly is SafeMoon?
SafeMoon is a BEP-20 token that was released on March 8, 2021, on the Binance Smart Chain (BSC) ecosystem. BSC is a centralized finance (CeFi) ecosystem that competes with Ethereum’s decentralized finance (DeFi).
SafeMoon has rapidly grown in market value to become Binance’s third-biggest cryptocurrency.
Protocol for a SafeMoon
The SafeMoon Protocol is a Defi Token created on a fair basis by the community. Each transaction consists of three basic functions: reflection, LP acquisition, and burn.
According to its website, cryptocurrency is composed of three primary components. The first stage is reflection. This is where SafeMoon transfers incur a cost that is divided among token holders.
The second is a transaction fee that will be distributed across different liquidity pools on Pancake Swap and other platforms. The third component is a token burn that happens at the conclusion of each transaction. The whitepaper and the rest of the website make no mention of the proportion of each transaction that is burnt. It simply states that transactions are subject to a 10% charge that is divided in half.
5% is allocated to reflection prizes and 5% to liquidity pools. 2.5 percent of the 5% paid to liquidity pools is converted into Binance Coin (BNB) to guarantee the pair’s liquidity.
The SafeMoon whitepaper says that the team intends to do manual token burning. These burns do not seem to be pre-programmed into the SafeMoon procedure, but will be carried out at the team’s discretion.
It is unknown what criteria the team employs to make these choices, or how much authority the team has when it comes to altering SafeMoon’s maximum supply. The team’s capacity to burn tokens at will may allow for possible supply and price manipulation. As shown above, 416 trillion SafeMoon have been consumed so far. This amount is properly reflected by the following wallet, which seems to be the burn address for SafeMoon.
SafeMoon is presently ranked 202 on coinmarketcap, with a market cap of $2.9 billion and a total supply of 585 trillion tokens. SafeMoon has a total quantity of one quadrillion tokens
The token is managed by a group of six individuals who seem to have worked together before.
LinkedIn profiles indicate John Karony, the CEO, Thomas Smith, the Chief Technology Officer, and Trevor Church, the Community Manager, established and worked at an independent gaming company called TANO, an abbreviation for Technically A New Operation.
On TANO’s website, there are just the words “Alpha Launch Coming.” As a result, it’s unclear if this is a working company or something new.
Thomas Smith, the group’s CTO, has the most established professional experience, having held different software engineering positions at a variety of businesses.
The remainder of the crew seems to have a range of expertise in web development, game development, and general administration. According to his LinkedIn profile, Henry “Hank” Wyatt, SafeMoon’s vice president of research and development, also established a gaming development business. Regrettably, the website generates a 521 error from the host. Jacob Smith, SafeMoon’s web developer, reportedly also worked for this game production firm.
According to Jacob Smith’s LinkedIn profile, he “As the main website developer, I was responsible for many of their initiatives. Work is now on pause owing to a lack of it.”
Henry Wyatt is the team’s lone four-year graduate. The remainder seem to have attended university or college for short durations.
While schooling or experience working for bigger businesses are not required to create a cryptocurrency, their prior job history and qualifications seem to be a little murky. They advertise SafeMoon on their Twitter accounts, which is not uncommon for crypto project founders, but it’s difficult to determine the project’s legitimacy or qualifications.
Additionally, the site sells SafeMoon-related items, such as sweatshirts, caps, and sweatpants. This is unusual for a cryptocurrency project, but the profits may be used to fund development.
What Distinguishes SafeMoon From Bitcoin?
As previously stated, SafeMoon is a Binance Smart Chain-based BEP-20 token. Changpeng Zhao, the founder of Binance, has acknowledged that BSC is not decentralised. Zhao dubbed BSC “CeDeFi” in a since-deleted tweet, which is an acronym for centralised DeFi and a bit of an oxymoron.
Validation of Authority
Binance’s Smart Chain is based on a consensus method known as proof of authority. In authority proofs, the block creators are referred to as validators. Binance has pre-approved and selected these validators. They must verify their true identities, invest money to demonstrate long-term commitment, and be on an equal footing with all other applicants in order to be accepted. As a result, evidence of authority is by design reputation-based.
Binance maintains complete control over the blockchain under this approach. They appoint validators and remove validators at their discretion. All chain users must have faith in Binance’s ability to act in the chain’s best interests. Binance has the ability to change any element of the chain or ecosystem.
Proof of Work Bitcoin has an entirely new consensus method known as proof of work. Proof of work was the initial consensus method employed by blockchains and has shown to be very efficient at safeguarding a decentralised system from malicious actors.
Computers compete against one another to process and verify transactions in proof of work. The computer must answer difficult mathematical problems in order to win this tournament. Once they’ve won, the computer updates the blockchain with a fresh block of transactions. These machines, dubbed miners, are compensated with Bitcoin for successfully completing a new block of transactions.
This procedure is very energy-intensive yet contributes to network security. A sufficient number of geographically dispersed miners results in a decentralised network without a central authority, which is diametrically opposed to the BSC’s operation. Bitcoin is now a highly dispersed and decentralised network with hundreds of thousands of nodes and miners located around the world.
Should You Consider Investing in SafeMoon?
Investing in SafeMoon is a personal choice that should be taken based on your tolerance for risk. SafeMoon’s success is contingent upon Binance, the SafeMoon team, and whatever community forms around it.
A measured investment in SafeMoon would need the investor to consider the Binance Smart Chain’s centralization and the extent to which Binance controls it. Additionally, it would need a degree of trust in the authenticity of the SafeMoon team, which has little prior success to its name. While individuals must begin somewhere, a healthy amount of cynicism may go a long way.
Due to the centralized nature of proof of authority, SafeMoon, like all other tokens on the Binance Smart Chain, is essentially at the discretion of Binance. If Satoshi Nakamoto reappeared and was able to make direct changes to Bitcoin’s code and have them deployed on every miner and node in the network, the system would cease to be decentralized, eroding trust in the system.
Investing in SafeMoon at this point would be pure speculation since the team and concept are unproven. Having said that, all ships rise with the tide. If Bitcoin maintains its bull market trajectory, there is a possibility that SafeMoon may rise in value as well, and other speculative investors may drive it higher, but these are dangerous bets.
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