- Safemoon, a new digital token launched in March, has rapidly captured the attention of crypto traders.
- Searches for the new cryptocurrency this week peaked early on April 20, the day dogecoin was meant to soar to $1.
- “SafeMoon is similar to dogecoin in the sense that it is unclear what the utility of the project is or will be,” Ava Labs president John Wu told Insider.
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April 20 was meant to be ‘doge day‘.
But instead of seeing their favorite meme-based token rocket to $1, dogecoin enthusiasts watched as chatter on social media coalesced around a lesser known coin: safemoon.
Safemoon launched in March and is up by roughly 2,000% in a month, according to CoinGecko. Searches for the cryptocurrency this week peaked early on April 20, as momentum was meant to be building behind dogecoin. The coin climbed to a high of $0.00000904 at around 11 a.m. ET Wednesday, and continued its climb by 3% until the next day, according to CoinGecko.
To the dismay of dogecoin fans, meanwhile, the meme token slipped 18% Thursday after reaching a high of $0.42 and has continued to slide since, even dipping under $0.20 briefly on Friday.
Safemoon is a decentralized finance token launched in March 2021. Its tagline, according to its website, is “Safemoon to the Moon!”, a similar slogan trumpeted by dogecoin fans. “To the moon” has been spouted by celebrities including Elon Musk, a vocal supporter of dogecoin who has been known to push the token higher with his inscrutable tweets.
“Safemoon is similar to dogecoin in the sense that it is unclear what the utility of the project is or will be,” John Wu, president of Ava Labs, the team behind altcoin avalanche, told Insider.
He continued: “Worst case, this is a scam or Ponzi scheme. Better case, this was a euphoric rally driven by TikTok and other viral marketing engines.”
However, unlike dogecoin and other cryptocurrencies, safemoon encourages investors to hold. On its website, it said holders will earn passive rewards through “static reflection.” This means the team behind safemoon plans to make the reward dependent on the volume of the token being traded. Safemoon in fact charges those selling it a 10% exit fee and distributes half that fee to other holders.
Ian Balina, founder and CEO of Token Metrics, a data-driven investment research platform for crypto, said while there isn’t much to say about safemoon just yet, especially when it comes to its blockchain, its trading volume is getting some attention.
“It is very popular online,” Balina told Insider. “People are just taking up tokens just like dogecoin based on social media.”
The new cryptocurrency has gained traction on social media, TikTok in particular, with one video promoting the coin garnering nearly half a million views.
Ben Weiss, CEO of CoinFlip, which provides bitcoin ATMs across the US, said safemoon has social-engineered its way into social media trends and built a community of hype and speculation around it.
“[Social media] has caused it to rally and people are buying into the hype without much knowledge of safemoon utility or if they don’t want to miss out on the next Dogecoin,” he told Insider. “Since blockchain and cryptocurrencies are still so new and people are seeing crazy price actions around them, it’s no surprise to see similar projects like this that feed on hype.”
Here are what five other experts think of the latest craze sweeping the crypto market:
“Safemoon is one of a number of new cryptocurrencies appearing on the market which attempt to address some of the problems that Bitcoin and other cryptos have that block mass adoption. For example, Bitcoin is notoriously volatile its valuation can vary wildly from one day to the next and that makes it undesirable for day-to-day commerce or business activity. Safemoon’s exit fee is an attempt to…