SafeMoon (SAFEMOON) is one of the most hyped cryptocurrencies in the market today. Launched in March 2021, the “DeFi token” has since climbed and fallen down the market cap rankings. It became the 33rd biggest crypto by market capitalization on May 11, when it hit an all-time high of $0.00001094 (according to CoinGecko). Since then, it has slipped down to 52nd, with its price now standing at $0.00000417.
Despite losing value, SafeMoon remains popular among investors. It has proven almost as popular as ethereum in Google searches, and rose above XRP in April and early May. It has also received vocal backing from prominent traders, such as Dave Portnoy.
I’ve never been more confident in my decision to back #SAFEMOON I had no clue all this hate and jealousy in #crypto existed. But as Reggie Jackson once said “fans don’t boo nobodies”. If people are this frightened of the #SAFEMOONARMY that means I picked the right one
— Dave Portnoy (@stoolpresidente) May 17, 2021
However, investors should treat SafeMoon with extreme caution. It remains a highly unproven altcoin with a number of glaring flaws. We list 10 ways it puts your money at risk.
1. SafeMoon doesn’t have any utility
It may be several months old now, but still no one really knows what it is supposed to do. Safemoon describe the coin on its website as a “DeFi token,” but this doesn’t tell us much. Its ‘whitepaper‘ is also laughably thin, describing only the coin’s internal economics and nothing else.
It therefore seems that SafeMoon has designed its coin only to rise in price, and to have no wider use. This is fine for as long as it does rise in price. But if it falls, and if other altcoins offer better gains, it may collapse in a hurry.
2. SafeMoon penalises you for selling
While SAFEMOON is designed to rise in price, it charges holders for cashing out. If you sell your SAFEMOON, the SafeMoon protocol takes 10%. Half of this 10% goes to existing token holders holders. The contract also uses a quarter of the fee to ‘sell into BNB,’ according to the brief whitepaper. Basically, the owners of the contract use your sold SAFEMOON to buy Binance coin (BNB). They then pair the remaining quarter with the newly acquired BNB, adding both as a liquidity pair on PancakeSwap.
Safemoon intends this 10% fee to deter selling and to help SAFEMOON rise in price. But it’s not clear what exactly happens to the 5% which goes towards BNB. Do the contract owners — i.e. Safemoon — keep all the proceeds from adding liquidity to PancakeSwap? If so, they’re arguably profiting at the expense of SAFEMOON traders.
3. The protocol has a ‘critically severe’ issue related to safeguarding fees
DeFi security firm HashEx recently published an audit into the SafeMoon smart contract. It makes for some grim reading. Most notably, HashEx discovered two issues of “critical severity.”
The first relates to a lack of “safeguards for fees,” with the contract controlling fees (paid during SAFEMOON sales) being owned by an external account. According to HashEx, this means that if the owner of the smart contract were a bad actor, they could easily drain it of its accumulated fees. In other words, the fees you pay for selling SAFEMOON will end up lining someone else’s pockets.
4. It has another critical issue related to ownership of its smart contract
HashEx identified another issue of critical severity. It found that the ownership of the SafeMoon smart contract can be temporarily renounced. This can create confusion among users, who may incorrectly think the contract has no owner. Ultimately, HashEx says it identifies “this behavior as fraudulent.”
5. SafeMoon’s contracts have a ton of other issues
In total, HashEx identified 12 issues affecting SafeMoon’s smart contracts. Two of these are of critical severity, as described above. Another two are of high severity, with four being of medium and another four being of low severity.
A slew of critical vulnerabilities has recently been identified by the DeFi security provider #HashEx when examining the #SafeMoon #DeFi project. The identified issues are so severe that users are being warned to stay away from the protocol for fear of losing their funds. $SFM
— Weiss Crypto (@WeissCrypto) May 25, 2021
What’s worse is that many of these issues can be exploited at the same time, greatly increasing the risk for investors that something will go badly wrong with SafeMoon. Here’s what HashEx concluded in its report:
At the time of the audit, the owner of the token contract is set to an EOA account (externally owned account), which implies high risks for token holders as if the owner account is compromised an attacker can break the token functionality completely (for example, by blocking any transfer).
6. It runs on the Binance Smart Chain, which has had its own issues
SAFEMOON is a BEP-20 token, meaning it runs on Binance Smart Chain. In itself, there’s nothing really wrong with this. However, BSC has suffered a number of issues recently across several of its platforms.
On May 20, malicious actors exploited bugs in BSC’s PancakeBunny protocol, stealing some $45 million in BUNNY tokens.
Today, BUNNY tokens worth $1B+ were minted from Bunny Finance on BSC, resulting in $40M+ was stolen:
– 114k WBNB ($40M)
– 697k BUNNY
For this reason, the BUNNY price fell from $146 to $6👇 pic.twitter.com/BBVfWOHgZH
— Igor Igamberdiev (@FrankResearcher) May 20, 2021
Likewise, likely manipulation of the Venus Protocol (XVS) price resulted in $200 million in liquidations on May 19.
Today we have witnessed the manipulation of XVS price — the governance token of Venus Protocol on BSC.
This incident resulted in $200M+ DeFi liquidations and a $100M+ of protocol bad debt.
As usual, let’s analyze this situation below👇 pic.twitter.com/pAnjqHI25T
— Igor Igamberdiev (@FrankResearcher) May 19, 2021
This doesn’t necessarily affect SafeMoon. However, it suggests that the altcoin operates in a potentially uncertain environment. One which may result in traders losing money.
Binance smart chain #BSC broke today due to our volume. They are still having issues. This is not on us. Please be patient while BSC fixes their infrastructure.
— SafeMoon (@safemoon) April 20, 2021
7. SafeMoon has very low liquidity
SafeMoon has extremely low liquidity. It’s such a small market that, if a big holder sells, its price is likely to fall steeply. For example, its price crashed by more than 80% in late April when a whale sold $8.5 million’s worth of it.
#SafeMoon is one of the most obvious Ponzi Schemes on the market.
The creator of this coin owns 95% of the supply. Today, he sold $8.5M (5%) and the price crashed 84%
Imagine what happens when he sells the rest? It goes to zero… pic.twitter.com/1ligCdluQm
— Mr. Whale (@CryptoWhale) April 22, 2021
Smaller holders will never be able to predict when a larger holder is going to sell. This arguably makes holding SAFEMOON tantamount to gambling.
8. SafeMoon is hard to buy and sell
SafeMoon isn’t really listed anywhere. Right now, the only place you can really trade it is on PancakeSwap, a decentralized exchange on Binance Smart Chain. Traders therefore need to go through a relatively involved process to get their hands on it. They need to create a Binance account, buy Binance coin (BNB), swap BNB for SAFEMOON, download a wallet such as MetaMask, and also enable such a wallet to work with BSC.
With major exchanges such as Coinbase and Kraken steering clear of SAFEMOON, traders have to work quite hard to acquire the coin. But with few outlets to buy and sell it, it further worsens its problems with low liquidity.
9. SafeMoon’s team appear reluctant to answer hard questions
Back in late April, some members of SafeMoon’s team participated in an Ask Me Anything (AMA) at the Miami Crypto Experience. The thing is, they didn’t really answer any relevant questions, instead choosing mostly to speak with guests about unrelated topics. This didn’t create a good impression, and the coin promptly fell shortly after.
Such an appearance arguably fits in with the lack of detail on SafeMoon’s website and in its so-called whitepaper. There seems to be an avoidance of accountability and transparency, something which could potentially ring alarm bells.
10. It is well below its all-time high
SafeMoon has fallen much further from its recent all-time high than major cryptos such as bitcoin, ethereum and Binance coin. It’s now down by just over 61% from its ATH, according to CoinGecko. By contrast, bitcoin, ethereum and BNB are down 42%, 38% and 44% from their respective ATHs.
When the coin falls, it falls hard. This should be another warning sign for investors. Because even if it appears to offer big short-term gains at the moment, it also offers big losses.
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How Archer Swap Has Helped End Ethereum’s Bidding War
Most DeFi users have heard of Ethereum’s high congestion issues, but few are aware of the controlling forces operating behind the scenes, and how badly they can be impacted by this single problem. When traders send a regular transaction via the Ethereum network, it is susceptible to attacks from bots or front-running software run by entities seeking to profit from trader activity.
Ethereum’s ecosystem is perhaps amongst the fastest growing in the crypto space. Thus, there are already many solutions that tackle this issue and operate for the benefit of the users and decentralized exchange (DEX) traders. Most of them have gone under the radar.
Archer Swap is part of the Archer DAO, a project with features designed to mitigate the risks associated with sending transactions on Ethereum. It protects users from Miner Extractable Value (MEV) strategies, sandwich attacks, and front-running bots while maintaining a connection with Uniswap and SushiSwap, two of the most popular DEXs on Ethereum.
In this sense, Archer Swap can be described as a DEX extension that enhances the trader experience on these dApps. This protocol combines two powerful sets of features that give traders improved operations on Ethereum – protecting them and making trades more cost-efficient.
The first set of benefits are called Archer MEV Shield. Besides protecting transactions from bot attacks, it allows users to eliminate failed transaction fees, a recurring problem on Ethereum. Traders can also cancel transactions at no additional cost.
The second feature is called Archer Trader Extractable Value (TEV), a proprietary and innovative concept introduced by Archer Swap. Operating within the Archer Relay, Archer TEV uses automated rebalancing transactions with bots to sync market prices when big market moves occur.
After a trade or a big swap, there is usually an arbitrage opportunity in a market. Archer TEV uses these opportunities to capture the value and redistribute it to Archer Swap users. In essence, Archer TEV takes revenue generated by Archer Swap and gives it back to one of the protocol’s core components, the traders.
Archer Swap Launches Campaign To Reward Traders
Following a community vote, Archer DAO recently launched a 6-week campaign to buy back and distribute its native token ARCH. In this way, the protocol can reward early adopters. The tokens will be acquired with the revenue generated by Archer TEV.
The protocol won’t have to touch its treasury reserves to attract new users to the platform. The protocol and the users will benefit – as more users trade on Archer Swap, the campaign will have more resources to acquire and distribute ARCH. Therefore, the token will most likely see an increase in buying pressure during the coming weeks, and the platform will see a surge in the number of users.
Archer DAO will distribute rewards every Friday from June 11th to July 16th, 2021. The platform will calculate rewards for each user based on their transacted volume for each week. The rewards will be delivered automatically and with basically 0 risk for the users, all they need to do is trade.
Archer Swap has had famous trades. In May, during the high of the dog meme coins, the inventor of Ethereum, Vitalik Buterin, used Archer Swap to dump his supply of Shiba Inu (SHIB), AKITA, MIRI, ELON, and others into the market.
The dump served a good cause, as Vitalik used this money to send over $1 billion to different charity organizations. The most notable is the Covid-19 relief campaign for India started by Polygon’s co-founder, Sandeep Nailwal. This trade could be among the most famous in 2021 and was enabled by a protocol whose main objective is to shield its users and give them back the power to operate safely within the Ethereum dark forest.
Crypto Crash Trends On Twitter As Bitcoin Falls Below $30,000
Twitter has gone into a frenzy after bitcoin fell below $30,000 this morning. The hashtag #cryptocrash is currently trending on the platform. This is after the coin broke the $30,000 stronghold and fell below it. A price that has been a stronghold for bitcoin for a while now. Speculations were that as long as the asset didn’t fall below $30,000, then there would be a recovery.
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Bitcoin has been in a downtrend for a couple of days now. News of mining rigs closing down in China pushing the price even further down. Falling below $30,000 means bitcoin is about to erase its gains for 2021. The coin was trading at $29,001 n December 2020. Only breaking the $30,000 barrier in 2021. Now bitcoin is trading at only 3% gains for the year 2021.
Bear Market Trends
Richard Bernstein was on Trading Nation two weeks ago to talk about the trends in bitcoin. The CEO called bitcoin a bubble. He pointed out that bitcoin was currently in a bull market. Noting that people were leaving the markets that were actually in a bull market behind.
Bitcoin crashes below $30,000 before recovering back up to $32,000 | Source: BTCUSD on TradingView.com
Bitcoin has been struggling for the past two months. This was after the coin finally hit the all-time high of $64k in April. There was a lot of speculation that the coin was headed for $100k. But it seems the asset had other plans.
Analysts have compared this to the 2018 crash. When bitcoin hit a new ATH of nearly $20k and then proceeded to lose 80% of its value. At one point trading at a little over $3k.
There Is Still Hope For Bitcoin
Novogratz further explained that calling a bottom on the crash is hard to do. This he attributed to the large liquidations currently taking place across a number of assets.
With regards to the $30,000 price level, Novogratz said, “We’ll see if it holds on the day. We might plunge below it for a while and close above it.”
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The co-founder of Galaxy Digital noted that he wasn’t worried about the price crash. Explaining that he does not expect another crash of the 2017 magnitude to occur again. This he chalked up to the maturity of the ecosystem. Pointing out that much more mature players are now moving into the system.
“Every single bank is working on their own crypto project, how they can get bitcoin to their wealthy clients. I think a lot of clients that didn’t buy it the first time will see this as an opportunity to buy it and get involved.
– Mike Novogratz, CEO of Galaxy Digital
Twitter users have taken to the platform to express their opinions on the current market movements. There are countless tweets asking people to not panic. That the market is going to recover. And right now, it is starting to look like they’re right as the market has gone back into the green. Bitcoin is currently back up to $32k, after a dramatic price drop below $30k.
Featured image from Forbes, chart from TradingView.com
Asia Broadband Forays into Crypto with Gold-backed Token and Exchange
Asset-backed tokens have long offered significant promise to transform the world of finance and investing. 24/7 trading, instant settlement, and fractionalization are just a few of the benefits offered when assets are recreated as cryptocurrencies on a blockchain. From the perspective of the cryptocurrency investor, tokens backed by real-world assets may also offer an opportunity to hedge a portfolio against some of crypto’s notorious volatility, which has once again been in evidence over recent weeks.
The traditional hedging instrument of choice, gold, is ripe for tokenization. Owning physical gold comes with issues such as storage and security, not to mention that it’s a relatively illiquid asset. Instruments such as ETFs may not offer the same direct exposure to gold prices. In contrast, gold-backed tokens are directly linked to gold prices and provide a fast and easy way to buy and sell gold, introducing new liquidity to the markets.
Over recent years, several firms have attempted to launch a version of tokenized gold; however, there has been an absence of operators from within the gold sector itself. Now, Asia Broadband, Inc. (OTC: AABB), a resource company focused on the production, supply, and sale of precious and base metals, has released its own gold-backed token.
For the 25-year-old US firm, it’s the first foray into the world of digital assets. And for the cryptocurrency space, it’s the first time an established player has emerged with a vertically integrated “Mine-to-Token” concept.
About Asia Broadband and AABBG
Asia Broadband was established in 1996, producing and supplying precious and base metals from Mexico to clients based in Asia. It’s now a US-listed company, delivering value to shareholders through its vertical integration approach to its value chain. In 2020, the company achieved an all-time high annual gross profit of $16.8 million, and over $100 million in assets for its first quarter of 2021.
The shift into cryptocurrency has come about thanks to the direction of the company’s president, CEO, COO, and Director, Chris Torres. Despite being a long-established business and finance leader, he has an aptitude for technology and possesses extensive knowledge of cryptocurrency investing. As a result, Asia Broadband has now released the AABB Gold (AABBG) token.
The company believes there’s a significant market for investors interested in owning cryptocurrencies as a digital store of value but who are likely to be put off by the inherent volatility in the crypto markets.
AABBG is backed by the gold mines owned and operated by Asia Broadband, along with $30 million in physical gold reserves. The company has made a public pledge to back 100% AABBG by gold reserves, supplied uniquely by its own mining operations, with third-party sources used only as a backup.
This vertically integrated “mine-to-token” concept is completely unique. Investors can benefit from knowing that they’re dealing with an established, US-listed firm and gain exposure to gold without any of the existing challenges.
Price and Demand
The minimum token price is pegged to the current spot price of gold, which means the token benefits from the lower volatility of gold relative to the cryptocurrency space, offering a sense of stability. Given fears of devalued fiat currencies, the bull case for gold remains intact, and AABBG could also rise as a function of increasing gold prices. As the price of gold fluctuates, the floor for AABBG tokens can change, but the potential upside price of the token will be driven by market demand.
It’s also worth noting that Asia Broadband’s experience and network in the gold sector also offer significant potential to drive demand. As the company has put extensive focus on the vertical integration of its own sales network in Asia, these global relationships provide the potential for cross-selling and deeper liquidity.
AABBG launched in March and, within two weeks, had sold $1 million worth of tokens. It’s now developing a proprietary exchange to allow AABBG holders to trade their tokens for various cryptocurrencies.
The entry of established professional firms to the asset-backed token sector could be just what it needs to get kick-started. With industry expertise, global networks in the business, and innovative business models, it’s evident that they’d have plenty to bring to the table.
Image by Daniel Dino-Slofer from Pixabay
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