SafeMoon V2: Game Changer or Time Bomb?
SafeMoon's V2 upgrade touts better security and tokenomics, aiming to lift SFM's value. The new commission structure benefits holders. As SafeMoon shoots for the moon, can it steer clear of legal hurdles?
The upgrade, or so-called SafeMoon migration, from V1 to V2 took place in December 2021. SafeMoon V2 (SFM) is an update to the SafeMoon system aimed at increasing the value of the native token and reducing the number of tokens without decreasing their worth.
Migration to V2 was marked by the termination of support for the first version of the contract. Besides, the project management recommended that owners swap V1 for an updated version of V2 so that users can save their assets and continue to partake in the ecosystem's life.
What is SafeMoon V2?
SafeMoon, both in the first and second versions, is a DeFi protocol that provides an automated process for generating liquidity. According to the concept of the project, the protocol should provide a secure method for profiting from crypto assets and prevent the emergence of "bubbles" in a highly volatile market.
Since its launch, the project has witnessed great social media support and has grown an enormous user base worldwide. However, reputational issues and a sharp drop in the price of the SafeMoon token forced management to switch to V2 to preserve the ecosystem and give the project a breath of fresh air.
SafeMoon V2 vs V1
The first thing the protocol developers notice is that SafeMoon V2 has a higher level of security and improved accessibility compared to the first version. Apart from the differences from a technical point of view, the difference between V1 and V2 lies in the mechanism of commission distribution.
SafeMoon (SFM) V2 charges users a 2% fee for transactions between wallets, as with the first version. Moreover, ecosystem participants must pay a 10% tax for purchasing or selling assets on the SafeMoon exchange. However, the main difference is that in the second version of the protocol, the commission distribution looks completely different:
- 4% SFM token holders
- 2% burned to support the price level
- 3% added to the liquidity pool
- 1% transferred to the so-called growth fund
The new commission allocation scheme allows the project to offer SFM owners a more profitable revenue system and accumulate funds to implement project initiatives.
SFM Coin Value
In the first version of the protocol, the project's architects chose a model for which the price of the native token existed in fractions of a cent. This is one of the most common models crypto projects use to interest early investors in their potential coin growth.
For users, a low initial price provides a chance to invest a small sum in a crypto asset, hoping that a promising project will lead to substantial gains (X gains) in a short time.
On the other hand, the low coin price may alienate big investors. Therefore, the project management decided to experiment and abandon the original SafeMoon token, changing the name to SFM, while the ratio of old coins to new coins became 1000:1.
Today, users can migrate to a new token without fuss or expense, although the process must be done manually.
SFM token key indicators on Coinmarketcap as of July 21, 2023:
- Token name: SFM
- SFM price: $0.0001789
- Powered by: ERC-20
- Fully diluted market cap: $177,510,029
- Market cap: $99,949,209
- Volume (24h): $1,141,294
- Total supply: 1,000,000,000,000 SFM
- Circulating supply: 558,759,836,557 SFM
The good news is that the SafeMoon token from V1 persists despite updates in V2. Transition to the new version necessitates manual control, and not all original token holders managed to switch to SFM.
SafeMoon Origin
John Karony is considered the forerunner of SafeMoon. In a month, the coin price skyrocketed by an unprecedented 20,000% due to support from top musicians and celebrities who actively promoted the project on social networks with their multi-million fan base. Even though the sharp jump in the asset price did not last long, such a rise in the deflationary token instantly attracted the attention of crypto users, pressing them with FOMO.
Critics also did not leave SafeMoon aside and began to actively study and discuss the technical side and security of the blockchain. Certik, one of the top security agencies, gave SafeMoon an 88 security score after checking its codes in May 2021.
Despite the existing protocol problems, SafeMoon was found to be relatively safe. The main problem is that liquidity providers have experienced intermittent losses. As a result, SafeMoon developed a new smart contract feature that converted 5% of fees received into the newly created liquidity pool.
SafeMoon V2 Roadmap
Despite facing substantial criticism, the crypto project remains focused on developing its ecosystem by introducing new features and products to enhance its value for end users. As of the latest update, SafeMoon V2 plans to incorporate the following features in 2023:
- MoonCraft (Minecraft Server)
- SafeMoon Podcast
- SafeMoon Contract V2
- SafeMoon Exchange
- SafeMoon Connect
- SafeMoon SWAP
- SafeMoon Hard Wallet
- SafeMoon Card
- Android and iOS Wallet
- SafeMoon Blockchain
- 2 New Exchange Listings
- SafeMoon Documentary
Apparently, the DeFi protocol plans for 2023 to convince its many users that SafeMoon is still a promising investment solution.
Facing Multiple Class-Action Lawsuits
On February 18, 2002, SafeMoon faced a class action lawsuit while the company was accused of operating an illegal pump and dump scheme. Besides, the case also affected many celebrities (Nick Carter, Soulja Boy, Lil Yachty, Ben Phillips, etc.) who actively promoted the coin on social media.
The proceedings resulted in fines for celebs caught in a back-door deal with SafeMoon. All these accusations cast the project in a negative light and raised doubts that V2 could have any significant impact on the positive development of the project in the future.
