Let’s examine the most obvious reasons SafeMoon could be a scam.
While we’ve seen plenty of both new and old cryptocurrencies moon overnight for no reason, the SafeMoon moonshot is absolutely wild.
In this section of the SafeMoon guide, we try to answer whether SafeMoon is a scam, or whether it’s actually legit.
We answer the two biggest questions that continue to come up when investors try to find out whether SafeMoon is a scam.
1. Does SafeMoon’s tokenomics resemble a pyramid scheme?
The first question mark around SafeMoon is whether it’s a pyramid scheme, or even a ponzi.
When we earlier asked the question why is SafeMoon so popular, the ponzi-esque tokenomics was actually our biggest red flag.
While SafeMoon’s tokenomics say that they’re the way they are to incentivise HODLing, it’s literally the definition of a pyramid scheme.
The model followed is that profits made by early investors are based purely on others paying more for the token at a later date.
When you buy SafeMoon, you’re charged a 10% fee by the network on each transaction.
5% of this fee will be burned, while the other 5% is redistributed to SafeMoon HODLers.
If something looks like a duck, swims like a duck, and quacks like a duck...
Then it probably is a duck.
2. Have SafeMoon’s founders locked away 50% of its own liquidity pool?
A second question mark over the SafeMoon crypto project is around the founders locking away over 50% of its own liquidity pool.
While Safemoon’s CEO has stated that the liquidity is being held to keep the SAFEMOON token more secure, a level of trust is still required.
So who is the SafeMoon team:
- The CEO of SafeMoon: John Karony, an ex-analyst for the U.S. Department of Defense.
- The CFO of SafeMoon: Thomas Smith, an ex Director of Software Engineering or CTO for a variety of software-related companies.
What makes me really nervous, is that neither of SafeMoon’s founders has a proven track record in the cryptocurrency industry, let alone in DeFi.
DeFi coins like SafeMoon require a level of trust in the team, as well as in the security of the platform itself.
Something we’re not quite sure that we should, let alone can, give this team.
When Pancakebunny was hacked, we spoke about how important it is to find a DeFi platform run by a team that you can trust.
The biggest reason that so many here in the LeoFinance community have chosen Cub Finance is because of the team’s multi-year track record building scam-free crypto projects.
The SafeMoon team don’t have any sort of proven history to draw upon and the fact that 50% of its own liquidity pool being locked up even offers the option of a rug pull should be a huge red flag here.
Final verdict on whether SafeMoon is a scam
The more I read about and research SafeMoon crypto, the more it just feels like a scam.
All of the best crypto and blockchain-related projects are highly decentralised and usually open source.
SafeMoon on the other hand is entirely centralised, with the team maybe not directly controlling their own personal wallets of SAFEMOON, but having access to 50% of its own liquidity pool is the same thing.
Actually, it’s worse.
Even ignoring the tokenomics that make SafeMoon an actual pyramid scheme, the 50% of it’s own liquidity pool being locked up is the final nail in the coffin.
Whether there’s a rugpull, hack or code exploit, it’s on the cards.
SafeMoon is a scam.
Best of probabilities to you.
Direct from the desk of Dane Williams.
Why not leave a comment and share your thoughts on whether you think SafeMoon is a scam within the comments section below? All comments that add something to the discussion will be upvoted.
This SafeMoon crypto blog is exclusive to leofinance.io.