Safemoon is a new blockchain getting elephantine attention from critics and followers alike. The main problem that inflicts this blockchain is that it does not offer any type of utility other than moving in a linear motion depending only on recurring investing interest. The user base of the blockchain is growing rapidly despite many crypto influencers calling it out.
It seems that the strongest user base of Safemoon is based in Australia. While crypto adoption in the region is gaining momentum, the numbers of influential people who are claiming that this is a fraud are also rising. The DeFi token has launched five weeks ago and seen a growth of 200 times gains. This type of appreciation is making many skeptical.
The Safemoon website uses vague and technical worded articles to justify its utility. Many cryptocurrency enthusiasts have singled out this blockchain as a pyramid scheme. The crypto trader Quinten Francois pointed out the flaws of the blockchain that qualifies it as a scam and raises many questions. In a recent tweet, he says that such scam blockchains burn out the new crypto investors and make them cynical towards the entire crypto market system.
The main reason for receiving such stern critiques is the ridiculous amount of liquidity penalties if they wish to withdraw their funds. This penalty can range somewhere from 10 to 12 percent. Such an operating mechanism puts Safemoon under suspicion. It should be noted that most blockchains try to decrease transaction fees to increase their utility.
Is Safemoon a Trusted Project?
After heavily penalizing the investors who have invested in the blockchain, Safemoon burns half of the user holdings and sent the remaining to other investors to encourage them to hold on for longer. This type of system makes it impossible for investors to opt out once they have buy-in. Another important point that raises red flags is spotted by Scam advisory service called @WARONRUGS.
A tweet from this service states that the owner of the blockchain owns more than 50% of the total liquidity. Such a setup is ideal for making the investors susceptible to a rug pull any time they want. One New Zealand crypto investor with a 200,000 Twitter following base also pointed out that Safemoon blockchain cannot be trusted since it has a $7 billion fully diluted market in such a small time window. A survey of the official website does not provide any information about the office location.