According to January data, more than 4,000 cryptocurrencies already existed. Cryptocurrencies, or coins, are digital currencies. Most of them are absolutely unknown, and nobody trades with them. On the other hand, some of the new ones were able to rise to the top 50 very quickly, like SafeMoon. In recent days, the price of SafeMoon has risen tremendously as a crowd of investors has flowed towards the new coin.
Last week, meme coins provided an explosive form. Besides bitcoin, Dogecoin and XRP have gone great, but SafeMoon is not far behind. Many are already writing that this new cryptocurrency will be the rival of Dogecoin.
It helped a lot to increase popularity that American founders (John Karony and Thomas Smith) are constantly holding conference talks where investors can ask anything about the coin.
Created only a few weeks ago, SafeMoon is based on a simple scheme. It rewards those who hold it (they are hodlers) by taxing each transaction made with it with a 10% deduction. Half of that 10%, 5% is distributed among SafeMoon owners, while the other 5% is used by developers for further expansion and to keep the exchange rate.
Hodlers are those who buy and hold cryptocurrencies until those currencies worth a lot.
The price of SafeMoon is much lower than Dogecoin. While SafeMoon is about 0.000007 dollar (circa 0.002 forint), Dogecoin is 0.2658 dollar (kb. 77 forint).
The problem is that the sole purpose of SafeMoon is exchange rate manipulation. The SafeMoon, though creatively, is based on the classic pyramid scheme, where new entrants generate profit for old members. If the interest subsides, and transaction numbers drop, the 5% rewards will also drop, allowing people to lose interest in SafeMoon and look for more interesting investment opportunities by selling their tokens.
The investor base of SafeMoon consists primarily of members of the ten- and twenty-year-old TikTok generation, who want everything immediately. In recent weeks, SafeMoon videos, like “a few tens of dollars you can be a millionaire”, have started spreading on this social platform, leading to a tenfold increase in the exchange rate in a few days, but then SafeMoon collapsed quickly.
It happened several times that the price of a new cryptocurrency has gone up just because a kind of popularity has developed around it.