SafeMoon is a cryptocurrency token that has garnered attention from celebrity endorsements and its tagline of “going to the moon.” However, there are some quirks to this token that make it more challenging to buy and potentially riskier than other leading cryptocurrencies.
One of the most distinctive features of SafeMoon is that it charges a 10% fee whenever you sell the token, which is meant to encourage long-term holding, discourage selling, and reward holders of the coin. Half of the fee goes to current token holders in a distribution called a “reflection,” while the other half goes into a liquidity pool that SafeMoon uses to maintain price stability.
SafeMoon does not have any other special use case besides being a store of value and doesn’t facilitate any automated contracts or decentralized applications like Ethereum. In December 2021, SafeMoon launched an updated version of the token called SafeMoon V2, which aims to consolidate the original version at a ratio of 1 to 1000 and significantly lower transaction costs. The new transaction fee for SafeMoon V2 is 2%, and 50% of the fee is distributed to current token holders.
Buying SafeMoon may be challenging, as the only way to pay for purchases of SafeMoon is with other cryptocurrencies, and it’s not currently listed on any exchanges that accept fiat currency, like dollars. SafeMoon’s proprietary SafeMoon Swap can be used to trade other crypto, like Binance Coin (BNB), for SafeMoon tokens, and a few other crypto exchanges support trading in SafeMoon.
However, SafeMoon is a risky investment because of high volatility, and if you decide to sell, you not only take your investment loss but also lose another 10% because of the selling fee. SafeMoon is also less liquid, and it takes more work to convert it into cash, as you need to convert it to BNB first. The fact that SafeMoon isn’t on major exchanges is a red flag, according to some experts.
Despite the risks, SafeMoon has the potential to go viral and increase in value, as its name suggests. Holding SafeMoon over the long term can also result in financial incentives through the reflections received whenever other people sell their tokens. However, before buying SafeMoon, it’s essential to have the nerves to accept short-term losses and ensure that whatever is invested is money that can be afford to lose.