SafeMoon: Is Going to the Moon the Key Message? Don’t Fall for It

SafeMoon (SFM-USD) is approaching its one year anniversary. SafeMoon “launched on Mar. 8, 2021 with a SafeMoon price of $0.0000000010 and supply of 777 trillion SafeMoon tokens.”

Source: Zie Project / Shutterstock

The news you should know is that there is a SafeMoon V2 now. If you are an early investor, then there is bad news, as support for V1 has been officially closed.

What Is It?

Assorcing to CoinMarketCap, “SafeMoon Protocol is a decentralized finance (DeFi) token. […] [it] has three functions that take place during each trade: Reflection, LP Acquisition, and Burn.”

SafeMoon claims it is innovating to add value to blockchain, commerce, the metaverse, and non fungible token (NFT) products. These plans include a venture philanthropy model, too.

Stavros Georgiadis is a CFA charter holder, an Equity Research Analyst, and an Economist. He focuses on U.S. stocks and has his own stock market blog at thestockmarketontheinternet.com. He has written in the past various articles for other publications and can be reached on Twitter and on LinkedIn.

This goal seems vague. I am not sure yet what the value of investing in this stock is. Here are a few thoughts on what SafeMoon represents now in the cryptocurrency market.

Do We need another meme crypto brand?

There are thousands of cryptocurrencies and the majority of them are under the radar. What is the competitive advantage — if any — that SafeMoon has? Can it rely solely on the strength of its brand and its loyal community called The SafeMoon Army to succeed? The odds are not that great.

4 Interesting Features You Should Know

Safemoon was created on the Binance Smart Chain blockchain and SafeMoon Protocol V2 is a community-focused DeFi token that has four functions that occur at each trade.

The first function is called Reflections, and it means that 4% is redistributed to all existing holders. The second function is LP Acquisition, meaning that 3% is added to liquidity. Then there is a third function called Token Burn, as 2% of tokens are burned. Finally, the last function is the Growth Fund, as 1% is added to an Ecosystem Growth Fund.

If you are lost in the process, then remember that the main idea is that SafeMoon charges fees to discourage selling and encourage buyers to see their balance grow.

SafeMoon V2 has several benefits like flexibility, enhanced security, increased volume, and autonomy.

The question that is still unanswered is why should someone buy this stock? To get access to Mooncraft, a multiplayer Minecraft server? I don’t think so. I see a lot of blanks that cannot get filled with logical arguments on why should someone invest in this stock.

Take the products page, for example. There is already a wallet and the 2nd version of the SafeMoon Protocol Contract. Other plans include a hard wallet and an exchange. Still, why invest?

The Bottom Line

What are some cons of SafeMoon? It is not listed on leading crypto exchanges but for now, it can be traded on PancakeSwap, Decoin (DTEP-USD), Gate.io, and other platforms.

The concept of getting passive income based on 4% of Reflections makes me have doubts. It seems like a Ponzi scheme that encourages buy and hold.

As for utility, I see no clear real-world utility here. Okay, the Venture Philanthropy model has utility, but this is not in itself a competitive advantage.

It is an extremely high-risk speculative investment that lacks credibility.

On its webpage, it shows a rocket launching and heading to the moon. This “to the moon” investment idea is both nonsense and highly speculative.

The value add idea is too general and abstract. I see no reason to invest in SafeMoon other than pure speculation. Be wary of this very risky choice.

On the date of publication, Stavros Georgiadis, CFA  did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.


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