What is Safemoon V2?

SafeMoon is a decentralized finance token that lives on the Binance Smart Chain (BSC). The cryptocurrency was launched in March of 2021.

The goal with Safemoon is to solve two issues that often occur with cryptocurrencies. The investors tendency to sell prematurely and extreme volatility.

SafeMoon is short for “Safely to the moon”.

The phrase “to the moon” is used when a cryptocurrency has potential to make a strong upward trend in price.

Just like its name suggests, SafeMoon has shown significant price movement in the past years.

But is SafeMoon really safe? Read on to find out!

Key Points

• SafeMoon has high transaction fees of 10%. About 5% goes to existing holders while the other 5% enters liquidity pools.

• At the time of writing, SafeMoon has almost 3 million users worldwide.

• SafeMoon protocols involve 3 features: Static Rewards, Liquidity pools and Manual burn.

A Penalty for Selling SafeMoon?

As mentioned before, SafeMoon is designed to prevent investors from having “paper hands” AKA selling too early.

They do this by taxing those who sell their tokens at a high rate of 10%.

From the tax, 4% goes to the HODL-ers and the other 3% goes to liquidity pools. 2% is burned and 1% goes to a growth fund.

This of course isn’t ideal if you are currently making a loss on SafeMoon as most late adopters are.

The cryptocurrency is currently down 90% from its all-time-high and if you are planning to sell, it’s an additional 10% loss.

How does SafeMoon work?

SafeMoon has outlined its protocol under its whitepaper in regards to its deflationary mechanisms and fees. However, this is pretty technical so we have simplified it below:

1. Static Rewards/Reflection

As a SafeMoon token holder, you will be able to receive rewards derived from the tax that incurs when people sell the tokens.

This aims to correct the problem of volatility with the cryptocurrency by incentivising people who do not sell their tokens.

This is almost the same way dividends work for stockholders.

2. Liquidity pools

The liquidity pools in SafeMoon are automated, where 5% of transactions which include selling and swapping are added to the pools.

The pool will continue to accumulate tokens until it reaches a certain limit and then it converts from automated to a normal liquidity pool.

This allows the liquidity pools to not have to be reliant on stakers.

In addition, this creates a stable price floor for those who want to buy or sell.

3. Burning tokens

SafeMoon used to have a manual burn mechanism for deflationary purposes by eliminating tokens from circulation. This will decrease token supply in hopes of increasing the price of the token.

The burn rate is affected by “three important factors: reflection rate, token quantity and market volume.”,

SafeMoon vs Bitcoin

SafeMoon is a BEP-20 token issued on the Binance Smart Chain while Bitcoin is a completely decentralized coin that is described as the original cryptocurrency.

The main difference between the two is that they both have different consensus mechanisms.

Proof-of-Work

Bitcoin uses the proof-of-work consensus. In proof-of-work, miners which are computers will compete with each other to solve complex mathematical problems. The winning miner will get to add a block to the blockchain and is rewarded with the cryptocurrency after the transaction is verified.

This consensus mechanism is highly energy intensive.

Thus, new cryptocurrency projects have tried using different consensus mechanisms such as proof-of-stake or proof-of-history.

Proof-of-Authority

SafeMoon, which lives on the Binance Smart Chain, uses Proof-of-Authority. In this mechanism, the validators are pre-chosen by Binance.

To become a validator, they must submit their real identities, invest money and be involved in the long term. Binance has absolute control over the blockchain as they decide who can and cannot be validators for each block of transaction.

This is why Binance is significantly more centralized than the Bitcoin blockchain.

Kyle, the founder of SafeMoon

No one really knows for sure who created the SafeMoon token. However, according to some research done by the crypto communities, the creator could be a guy named Kyle.

Kyle was interested in making money through cryptocurrencies and he got the idea for SafeMoon when he discovered the BEE token which charges a 5% tax for sellers. 3% of the tax fees are put back to liquidity pools and 2% is distributed to holders.

It was said that the code for the BEE token was copied for SafeMoon with a few minor changes such as increasing the tax to 10%.

Safemoon V2

SafeMoon launched version 2 of their token in December 2021. According to the team, the V2 of SafeMoon offers better security, quality and accessibility than the V1. The transaction fees are still the same for the tokens which is 2% per wallet transfer and 10% for sell tax.

If you hold SafeMoon tokens on an exchange, the tokens will automatically switch from V1 to V2.

If you hold it in a wallet however, you will have to follow the SafeMoon swap site for consolidation.

On December 29th 2022, the SafeMoon team released an announcement within hours of the transition that a 100% tax will be imposed on SafeMoon V1 tokens. This would mean if anyone bought SafeMoon V1 tokens from any exchange, it would be taxed away.

Lawsuits that you should know about

In July 2022, it was announced that the team behind SafeMoon had been slapped with multiple class-action lawsuits. Allegedly, there were complaints that stated they have been inflating the prices of the token artificially.

Some of the complaints include:

1. Alleged defraudment of investors through a pump and dump scheme endorsed by the founders of the token and celebrities.

2. Safemoon had allegedly failed to register the tokens under the U.S Securities and Exchange Commissions.

3. Alleged forceful transition for investors from SafeMoon V1 to V2 while charging a 100% tax of the original without advance notice.

4. SafeMoon allegedly did not lock up the liquidity pools and have been redirecting funds, leaving the value of the token vulnerable.

The main point is that SafeMoon had been accused of allegedly misleading investors in investing in an unstable token and profiting from the losses.

How to buy Safemoon

If you’re looking to buy Safemoon here are the steps you need to follow:

1. Download a Binance wallet

You can download it via a Chrome extension on your desktop or through Google Play or iOS App Store. The best way to ensure you’re downloading the right app or extension is by visiting the Binance official website.

2. Set up the Binance wallet

Make sure to keep your seed phrase safe and note down your wallet address.

3. Buy BNB as base currency

Head over to the “Buy & Sell Crypto'' section to buy BNB tokens. Visit here if you are buying for your first time on Binance.

4. Send BNB to your crypto wallet

Go to the Binance wallet section and click withdraw. Set an amount to transfer and add in your wallet address.

5. Go to PancakeSwap

Connect your wallet to PancakeSwap or any other DEX platforms.

6. Trade BNB for Safemoon

If Safemoon does not appear, you can refer here and find the smart contract address. You can copy and paste the code into the PancakeSwap.

7. Swap the token

What has Safemoon been working on?

Q2 2021

• SafeMoon protocol was launched

Q4 2021

• The new SafeMoon 2022 Protocol was launched on the Binance Smart Chain.

Q1 2022

• Begin marketing campaign for SafeMoon 2022 Protocol.

• Negotiations with centralized exchanges to get them listed on Binance, Kucoin etc.

• Design Safemoon Exchange 2022 and NFT marketplace

Q2-Q3 2022

• Continuation of marketing campaign

• Confirmed listings on centralized exchanges

• Expansion of team and office spaces

Final Thoughts on Safemoon

SafeMoon is a cryptocurrency that aims to address the issues of early selling and volatility through its protocol features such as static rewards, liquidity pools, and manual burn.

However, its penalty for selling and high transaction fees may not be favorable for some investors. SafeMoon also uses a different consensus mechanism than Bitcoin, with its Proof-of-Authority system being more centralized.

While the launch of SafeMoon V2 improved security and accessibility, the team has faced multiple class-action lawsuits. As with any investment, it is important to do your own research and consider the risks before invest