There are numerous cryptocurrencies out there and each one of them is different from one another. No wonder Bitcoin and Ethereum are among the favorite cryptocurrencies and have gained attention. But there are some new digital currencies that have grabbed eyeballs from everywhere possible. One among them is Safemoon. It was launched in March 2021 and since then, there was no looking back for this new entrant in the cryptocurrency market. Naturally, the number of investors is bound to increase. If you have been thinking all this while investing in Safemoon then there are a few things that you should be aware of. This article will throw light on 10 things to know before investing in Safemoon in 2022.
What is Safemoon?
Safemoon is a DeFi token that enables trade on peer-to-peer chain networks. It eliminates the need of centralized systems such as banks or governments.
Tokens
Not many are aware of the fact that trillions of Safemoon tokens were destroyed/burned before being launched. At the time of launch, each token was priced at $0.0000000010.
Continued destroying/burning of tokens
About 223 trillion tokens were burned before the launch. What is worth a mention is the fact that the Safemoon team continues to burn tokens. This is done to reduce the supply and increase the price. To date, over 400 trillion tokens have been burned.
Rewarding the holders
One of the most interesting features of Safemoon is that it the investors are encouraged to hold their tokens rather than selling them. Yet another interesting point to note here is that an investor who sells a Safemoon coin will have to bear a 10% sales tax. Out of this, 5% is redistributed to the ones who are still holding their coins. The other 5% is used for a liquidity pool with Safemoon and Binance Coin (BNB).
Drastic price fluctuation
One cannot deny that early investors benefitted immensely. There was a time when Safemoon surged up to the level that the investors made profits beyond expectation. However, on the flip side, the last couple of months have seen a drastic price fall – more than 75% from its all-time high value. This turned out to be a point of concern for many.
Fees
Sellers are at a disadvantage here as there is a fee that is levied on them for selling and not holding. The main idea of doing so is to discourage day trading and resolve the significant price volatility suffered by other cryptocurrencies.
Utility
As a matter of fact, not many vendors accept Safemoon as a method of payment. Additionally, this cryptocurrency doesn’t trade on major centralized crypto exchanges.
Cash purchase
Though it is not that hard to buy Safemoon, one cannot overlook the very fact of not being able to purchase Safemoon with cash. This is because, as of now, there is no such exchange that lets you buy Safemoon using fiat money, such as dollars.
Future
The founders have a set of ideas that they plan to implement in the near future. Some of them that we can definitely look up to include Creating a Safemoon exchange, Releasing a Safemoon app, wallet, and video game and Integrating Safemoon with African markets, to name a few.
Is investing in Safemoon safe?
Well, this totally depends on the risk appetite of the investor. This is because; the last couple of months have seen the investors making both impressive gains as well as staggering losses. All in all, this has a risk element associated with it, just like any other cryptocurrency. Someone who has conducted extensive research done and has a thorough understanding of cryptocurrencies can definitely try their hands at it.
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