How to Buy SafeMoon

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When you spend time researching cryptocurrency online, you may come across the phrase "going to the moon" used to describe a particular cryptocurrency. One such currency, SafeMoon, has built its marketing around this phrase. However, it may be more difficult and potentially more risky to purchase SafeMoon compared to other popular cryptocurrencies due to its unique characteristics.

What is SafeMoon

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SafeMoon is a cryptocurrency that was launched in early 2021, it uses blockchain technology that was developed by Binance. In 2021, it gained a lot of popularity due to the endorsement of celebrities such as sports blogger David Portnoy, rapper Lil Yachty, and YouTuber Jake Paul. This made the value of SafeMoon to quickly increase, however, as of now its value has decreased by almost 90% from its peak.

The most peculiar feature of SafeMoon is that it charges a 10% fee each time you sell the token. For example, if you sell $1,000 of SafeMoon, you would have to pay a fee of $100 on the sale. This fee is in addition to any other fees that you may have to pay to the crypto exchange that facilitates the sale.

Shaun Heng, the Vice President of Growth and Operations at CoinMarketCap, a website that tracks prices of cryptocurrencies, states that the developers of SafeMoon say that the 10% fee when selling is implemented to encourage long-term holding. This is achieved by discouraging selling and rewarding holders of the coin.

SafeMoon uses the proceeds from all sale fees and distributes 50% to current token holders through a process called "reflection". The remaining half of the fee is added to a liquidity pool, which SafeMoon uses to maintain price stability.

It should be noted that SafeMoon does not have any other specific use cases besides being a store of value. It does not facilitate any smart contracts or decentralized applications, unlike Ethereum.

SafeMoon vs SafeMoon V2

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In December 2021, SafeMoon introduced an updated version of the token called SafeMoon V2. The new token aims to consolidate the original version at a ratio of 1 to 1000, with significantly lower transaction costs.

It's important to note that holders of the original SafeMoon tokens who have them in crypto wallets will not have their coins automatically migrated to V2. These holders will need to manually transfer their SafeMoon tokens to the V2 platform.

The process of switching holdings to V2 is easy. For SafeMoon Wallet users, simply update to the latest version of the app and follow the consolidation instructions. For users who hold SafeMoon tokens in other types of crypto wallets, they can visit the SafeMoon Swap site to consolidate.

For holders of SafeMoon tokens on an exchange, there is no need for any action, the exchanges will handle the migration process and notify you when it is complete.

The new transaction fee for SafeMoon V2 is 2%. Similar to the original version, 50% of the fee is distributed to current token holders, while the other 50% is divided among the SafeMoon liquidity pool and the managers of the overall SafeMoon ecosystem.

Read More: What is Bitcoin Mining? How Does It Work ?

How to Buy SafeMoon

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There are some obstacles to purchasing SafeMoon, the primary one for beginners being that the only method of payment for SafeMoon is through other cryptocurrencies. This is because it is not currently listed on any exchanges that accept fiat currency, like the US dollar.

Another issue with SafeMoon is that major exchanges such as CoinBase and Kraken do not support trading in SafeMoon. It is also not available on apps like Robinhood or SoFi Invest.

To buy SafeMoon, you can use SafeMoon's proprietary SafeMoon Swap to trade other cryptocurrencies, such as Binance Coin (BNB) for SafeMoon tokens. A few other crypto exchanges also support trading in SafeMoon.

If you do not already have any other cryptocurrencies, you will likely need to create an account on an exchange that allows you to exchange dollars for coins, as with many of Forbes Advisor's recommended crypto exchanges. Then, you will have to withdraw the coins from that exchange, transfer them to a wallet, and then move them to an exchange that supports SafeMoon trading.

Disadvantages of Buying SafeMoon

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SafeMoon is considered a risky investment due to its high volatility, which means the value of the investment can fluctuate significantly. This is a common characteristic of all cryptocurrencies, however, with SafeMoon, if an investor decides to sell their investment, they will not only lose their initial investment but also an additional 10% due to the selling fee.

Additionally, the high selling fee and lack of liquidity makes it a poor choice for frequent trading. It is also noteworthy that SafeMoon is not listed on major exchanges, which is a red flag and experts advise caution when considering this investment. Jeremy Britton, CFO of Boston Trading Co, a crypto investment fund, warns that "The exchanges have done their due diligence and found the project lacking. Ignore the experts at your own risk." 

Advantages of Buying SafeMoon

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SafeMoon, as a memecoin, has the potential to become popular and gain widespread attention, which could lead to its value skyrocketing. As an example, Dogecoin's value increased by over 200 times in a few months in 2021 due to its viral popularity.

If you plan to hold SafeMoon for a long period of time, you may also benefit from the reflections, which is a financial incentive where you receive a portion of the fee incurred when other people sell their tokens. This is a feature not present in most other popular cryptocurrencies, where you can only make money if the price goes up. 

Additionally, the recent update of SafeMoon 2.0 has reduced transaction fees, which could make it more attractive to exchanges and other potential use cases in the future. 

Should You Buy SafeMoon?

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SafeMoon is considered a high-risk, long-term investment, so it's important to be aware of the potential for short-term losses before investing in it.

However, Jeremy Britton, CFO of Boston Trading Co, a crypto investment fund, advises against investing in SafeMoon. He advises "I would suggest that anyone considering SafeMoon should run away screaming, or do some due diligence and then run away screaming." 

Instead, he suggests looking into other options such as investing in a top 20 coin listed on all major exchanges or a diversified crypto fund, as these have more liquidity and will be easier to sell. It's important to remember to only invest money that you can afford to lose if you do decide to buy SafeMoon.

Read More: Why Is Crypto Crashing? 5 Reasons Bitcoin Might Go Below $10k

Source: https://www.forbes.com