Cryptocurrencies are taking over the financial world and this trend is not going to end any time soon. There are more than 6,000 digital currencies available at the moment, and more and more of them are being created every day. This is why it is extremely hard for newbies to decide which cryptocurrency to research and invest in.
Most popular and valuable (at least for now) cryptocurrencies are Bitcoin and Ethereum. Although they are really successful, that is not the case for most of the cryptos. Many of them are considered a scam, and others will fail for one reason or another.
Today, we will have a closer look at one of the newest cryptocurrencies - Safemoon.
What is Safemoon?
Safemoon was introduced to the crypto market in March 2021. It is a community-driven project with an approach to a decentralized financial system. Now there are more than 2.5 million holders of the Safemoon cryptocurrency.
The founders of Safemoon aim to ensure safe gains. They have a long-term vision for the future success of the new cryptocurrency. Its holders receive rewards, and sellers receive a penalty.
Safemoon works with three simple functions - Reflection, LP Acquisition and Burn. Let’s have a closer look at each of them:
Those are static rewards, trying to solve problems with mining rewards. This happens by encouraging holders to collect higher payments, based on the total number of owned tokens. Also, the amount of the reward is based upon the volume being traded.
The aim here is to support early adopters and to keep them from selling their coins.
According to the documentation, the automatic liquidity pool (LP) is at the base of Safemoon. It creates a solid price floor for buyers and sellers.
Safemoon was created with the thought of long-term stability, and one of the most unusual features of the cryptocurrency is the 10% fee for selling coins. Five percent of the penalty is split between holders.
Most of the existing cryptocurrencies go through a process called burning. It removes tokens from circulation, to increase scarcity and value.
Safemoon employs the so-called manual burn, so it can implement benefits for long-term investors.
As Safemoon is a new cryptocurrency, it doesn’t have a long and interesting history to look at. Its current price is $0.000001936.
After its introduction, it saw a price jump to $0.00001399, which was more than 1,560 % higher than the previous week. Anyway, the price dropped to $0.00001118 by the end of the day.
Today, Safemoon has a $1,133,471,717 total market capitalization, which is not so bad for a new cryptocurrency, but compared to other digital coins, it is not so much.
The only purpose of Safemoon is simple - to be bought and sold and, by that, to drive the price up. This makes some specialists think that it may not be safe. As any other cryptocurrency, this one holds some risks.
Since its introduction, the price of Safemoon has been volatile, and it is not a surprise for anyone. Furthermore, many countries have regulations, or have banned the usage of cryptocurrencies, for many reasons.
Should we invest in Safemoon?
Taking into consideration that Safemoon doesn’t do anything and the only expectation of future profits is if people continue to buy it, it doesn’t really seem like a profitable investment.
Of course, in the crypto world, nothing is a hundred percent sure, and investing in any cryptocurrency is risky. That is why you should do research before you decide to invest your funds in any digital assets.
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