SafeMoon Tokenomics Explained

Updated: Jun 13, 2021

SafeMoon Tokenomics


SafeMoon Tokenomics. It’s what makes SafeMoon, well, SafeMoon. An explanation of Tokenomics is easily accessible on the SafeMoon.net website (the only official website; beware of scams). However, for everyone’s convenience, we’ll go through our own explanation and guide.



For a little backstory: SafeMoon was launched with 1-quadrillion tokens (that’s a lot of tokens!). The development team decided to “burn” 223-trillion tokens (22.3% of the supply). What that does is leave us with a 777-trillion token supply at the time of launch. Stating that this is the supply at the time of launch is very important because this is where the concept of Tokenomics comes into play. Tokenomics is the tool that will allow us to take the 777-trillion token supply and dwindle it down to a smaller number. Why does this matter? It matters because there is value in scarcity. There is only one Mona Lisa, for example, which leads to its value of $867 million+ (for a bit more scholarly explanation on the Scarcity Principle, see https://www.investopedia.com/terms/s/scarcity-principle.asp). Anyway, where were we? Ah, decreasing the supply of SafeMoon, right!


To decrease the supply of SafeMoon the protocol, according to their own whitepaper, “employs 3 simple functions: Reflection + LP (Liquidity Pool) acquisition + Burn-In each trade, the transaction is taxed a 10% fee, which is split 2 ways.

  • 5% fee = redistributed to all existing holders

  • 5% fee is split 50/50 half of which is sold by the contract into BNB, while the other half of the SAFEMOON tokens are paired automatically with the previously mentioned BNB and added as a liquidity pair on Pancake Swap.”

What that means in simple terms is that every time there is a buy or sell of SafeMoon tokens, a 10% fee is applied to those transactions. If you were to buy $1k of SafeMoon, you would only receive $900 worth of the token in your wallet. This is for a good cause and reason, so keep paying attention! That $100 fee from the earlier example is then split down the middle with 5% ($50 in this scenario) being redistributed to all holders of SafeMoon based on how many tokens they hold (this makes it fair so that someone with more faith and backing of SafeMoon is rewarded more than someone who just threw $1 for the heck of it). A part of that redistribution even goes to the burn wallet, which is simply a wallet that takes tokens out of the total supply of SafeMoon forever to (you guessed it) increase scarcity which in turn drives up the price. As of the 27th of May, the burn wallet was taking about 2.08% from the reflections (another term used for redistributions).


The other 5% besides that which is reflected back to the holders is split 50/50. 2.5% goes into further SafeMoon development and marketing, and 2.5% goes into a liquidity pool. The development and marketing side of things is pretty self-explanatory, but what is the liquidity pool? The liquidity pool is meant to stabilize the value of SafeMoon. When a large holder of SafeMoon tries to sell their tokens, the price would usually dump since there is a large and sudden increase in the supply of SafeMoon. However, we need not fear, for the dev team is here! The liquidity pool combats this dump by providing a safety net in the value of SafeMoon. This isn’t to say the value and price cannot drop, because it can, but these dumps take much less of a toll on SafeMoon than it would any other token that does not employ Tokenomics. The liquidity pool also serves the function of acting as a bank of sorts: it stores your money away, essentially backing the value of SafeMoon, and assures you that you will be able to sell your SafeMoon should you choose to do so.


To explore how your investment is benefited by Tokenomics, play around with our SafeMoon Tokenomics Calculator: Calculator (Make a Copy to Use). This is a powerful tool to understand the value of reflections, so make sure to check it out! Here’s an example of how Tokenomics have benefited investors so far:

  • An investment of $1k at $0.000003 would have given you 300-Million+ tokens added to your wallet simply in reflections for holding as of May 27th!

Let’s go ahead and speculate just a little for the sake of understanding reflections: let's say over the next year from your initial $1k investment there is a consistent 50 million daily trading volume that's consistent across the board. Each day there's going to be 2.5 million dollars worth of reflections with that daily trading volume. Assuming that the price and value of SafeMoon are equal to $0.00001 (natural growth based on burns and trading volumes), you will have earned, roughly, 106-million tokens. In total, your balance would show as $4,062 off of your initial $1k investment. If you were to sell, after the 10% fee for selling your tokens, you would be left with approximately $3656.33. If the price of SafeMoon were to stay exactly the same at the time of your initial $1k investment (NFA, but seems highly unlikely), you would have made $96 off of reflections alone.



Remember, SafeMoon is not a “get rich quick” scheme. This is a long-term investment, so if you are seriously interested in this project, please remember to do your research. Check out SafeMoon.net and check out our very own YouTube channel SafeMoon Education! (Not affiliated with SafeMoon, YET). We are working to bring more educational content your way, so make sure to subscribe and follow us for continuing education of SafeMoon for the masses!


Credit:

CyptoKing (Writer)


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