‘To the Moon’ is a popular refrain seen among crypto traders and investors, referring to their belief that cryptocurrency prices will shoot up ‘to the moon’, earning fortunes for those investors. This has most prominently been seen in discussions around the meme currency Dogecoin, but even the likes of Bitcoin and Ethereum have traders and interested parties who believe that cryptocurrency investments will be worth much more than they are in a very short span of time. It is therefore quite interesting that a new cryptocurrency token has literally taken its name from this concept of ‘going to the moon’, while it has a unique feature that could make it an interesting one to track and invest in over the upcoming months.
We are talking about Safemoon, which aims to send investors ‘Safely to the Moon’. This token was launched earlier this year in March, and its pitch to prospective buyers and investors has been that there is an in-built mechanism to prevent the sort of wild price fluctuations that we see in the likes of Bitcoin, Dogecoin and Ethereum. This seems to have created a buzz in the market, as over 2 million people have already bought Safemoon, according to its creators. Its price is just $0.000007, but that in itself is a rise of over 200% from the level that it was at just a month ago. This has given it a market capitalization of around $4 billion, and to give you some perspective around the current size of the crypto market, the market cap of Ethereum is $250 billion and that of Bitcoin is around $770 billion.
Safemoon’s biggest draw is its in-built mechanism to try and reduce volatility in its price. It aims to do so by imposing a 10% fee on all sales of the token, half of which is then redistributed to all other existing holders of the token as an incentive and reward for continuing to hold. In theory, this should discourage sales, especially of the sort that see the price of many tokens drop like a stone in a matter of hours, and the token’s creators have said as much, stating that their aim is to prevent the sort of dips that occur when ‘whales’ i.e. investors who have large amounts of a said token, start to sell their holdings in large quantities. Another feature of this token is that it uses manual burns rather than continuous burns. Burns are when tokens are removed from market circulation in a bid to reduce supply and increase the price. Most cryptocurrencies have automated burn cycles that remove a predetermined amount of tokens at regular intervals, but the creators of Safemoon have retained the ability to choose when to do so, giving them greater control over the token’s supply and price.
Of course, this has led to criticism that Safemoon is not a ‘true’ cryptocurrency, as key decision-making is still centralized with the creators of the token. This is a valid point, and we must wait and see if there are plans forthcoming to make Safemoon’s price open to the market completely. Nevertheless, this is still an interesting idea that deserves some time in the market to see if it works or not. In terms of future plans, the company has said that they are working on a Safemoon app, a wallet and games based on the token. They are also exploring the possibility of opening up trading of the currency on popular exchanges such as Binance while also building its own exchange by the second half of 2021.
Another criticism of this project has been that the owners own more than 50% of the liquidity of the token, which is again a problem in a market that is based on decentralization. Critics have also stated that this gives the creators an unprecedented amount of control over the token’s price, as they can affect market liquidity through their holdings, or even exit the project completely. Given the high frequency of scams and Ponzi schemes in the crypto market, it is necessary to know more about this token and its creators before investing your money into it. However, the idea, in itself, seems like an interesting one, and so it is probably best to wait and watch its trajectory over the next few months before deciding on an investment strategy.