How does SafeMoon tokenomics work?
SafeMoon is the newest cryptocurrency on the block that has made its debut on 14th March 2021, in the cryptocurrency market using the Binance chain ecosystem.
The initial price of this coin was $0.0000000010 and in the month of April, the price went up to $0.00001399. With this huge development within a month of its launch, SafeMoon was an immediate success, but with the crypto markets sudden ups and lows, the value of SafeMoon again went down to the bottom.
SafeMoon is a BEP-20 token that uses the Binance smart chain feature to secure itself. It has the name “safely to the moon”, but it does not have any particular use. Although the developers of the SafeMoon in their website have stated that they are planning to create video games, exchange wallets and merge with the African markets for further development and aiming to stabilize the SafeMoon token.
SafeMoon has three fundamental structures. First is reflection; reflection states that whenever a user sells the SafeMoon token, a 10% fee is applied to the user for selling the tokens. 5% of the charged fees are distributed among the currency owners, and the other half is used to maintain the liquidity pool between the Binance smart chain and SafeMoon. The term tokenomic implies the economics of cryptocurrencies. And SafeMoon has a deflationary policy which also resembles a pyramid scheme where investors are dependent on the buyers to increase their investment.
The second part of the SafeMoon structure is the pancakeswap. Pancakeswap is the process where you can buy and hold SafeMoon. Due to being relatively new in the crypto market, not all the exchange wallets and exchange platforms can offer and hold SafeMoon coins. Pancakeswap is the wallet where currently SafeMoon can be kept with ease. You cannot buy SafeMoon coins directly using money; first, you will have to buy Binance coins, and then you can exchange the Binance coins for the SafeMoon tokens.
Now comes the last process called token burn or manual burn. Manual or token burn is when the developers choose to burn (burning means destroying the tokens) the coins manually. 1 quadrillion coins were released during the launch of SafeMoon, but the developers chose to manually burn 223 trillion tokens at the launch. Until now, more than 400 trillion SafeMoon coins have been burnt by the developers. This is an approach to increase the price of the coins.
The initial success of SafeMoon is noteworthy, but the policies taken by the developers is not well appreciated. Especially when the coin has no real-world purpose. Investing in SafeMoon can be risky for the time being, until the developers bring something solid to back up their claims.