1 Safemoon’s amazing climb
Safemoon was launched on BSC on March 8th, and in just one month, the price rose 200 times, which means that if you put in 10,000 RMB to buy Safemoon at any time in March, it will become 2 million by mid-April. So on April 20, Safemoon replaced Dogcoin as the most searched cryptocurrency name on search engines. Contiune Capital says this model already accounts for more than 60% of new projects on the Coin and Firecoin ecosystem.
However, on April 21, its price reached $0.000013 and then collapsed, and later rebounded but the price never returned to that height. Today, it is priced at $0.00009 and still gives a good return to early investors anyway. what is the role of Safemoon? The team makes no apologies for its lack of usefulness; if anything, it uses a unique mechanism to incentivize people to hoard coins.
2 Safemoon’s unique mechanism
According to Safemoon’s whitepaper, when a user sells a safemoon, a 10% “exit tax” is levied, and half of that 10%, or 5%, is distributed equally to all holders, while the other 5% is divided into two equal parts, one for the contract owner to increase liquidity, and the other half is destroyed.
This mechanism of Safemoon is largely in line with the “HODL” concept of cryptocurrency, which encourages users to get rich by holding coins, but it also means that Safemoon investors have to wait for the price to rise by at least 10% before they can sell in order to make a profit, and the transaction cost is extremely high. This model can only be maintained if there is a constant flow of new entrants. And after its price drops, newcomers may find it harder to enter because of the difficult selling mechanism.
Because of this, cryptocurrency vlogger @TheCryptoLark, who has 270,000 followers on Twitter, directly called it a Ponzi scheme and said that the more scams it is, the harder it pulls up the market.
3 Safemoon’s controversy
One, the theoretical uncapped total.
Second, the founding team holds most
The big V @waronrugs, who has nearly 100,000 followers on Twitter, pointed out that more than 50% of Safemoon is held by its founding team, and there is always the possibility of crashing and running away.
Third, the lack of technical ability
Safemoon’s contract is directly copied from RFILIQ, a smart contract on ethereum. Safemoon not only retains the spelling mistakes of the original contract, but also retains some of the still questionable issues of the original contract. This also raises questions about Safemoon’s security.
Safemoon’s model originated from the PIG, imitation disk SAFEMARS on the ethereum chain, which was so hot that it led to the continuous downtime of Matcha Exchange; HTMOON on HECO also detonated quickly, but fell immediately after pulling to a high point, once again triggering a large number of Chinese retail investors to defend their rights. The article by Continue Capital says that almost the majority of BSC and HECO are now in this mode. There are even a large number of similar projects with the same name in the market, making it difficult to distinguish between the pluses and the devils.
Posted by:CoinYuppie，Reprinted with attribution to:https://coinyuppie.com/what-is-the-safemoon-model-that-is-spreading-virally-on-exchange-public-chain/
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