According to SafeMoon coin developers, more than 2.4 million people have purchased the cryptocurrency despite it being only 4-months-old and has received widespread promotion from influencers both on YouTube and Twitter making first time investors pump in their money on the novice coin.
Despite SafeMoon being the talk of the town after its rival Dogecoin and Shiba Inu, the crypto investment community has raised red flag over SafeMoon's unusual deduction structure of charging a whopping 10% fee to buy the coins and another 10% fee to sell the coins, which is quite unheard of in the crypto world and expensive for investors to bare.
SafeMoon in its defense says half of the fees would be paid to coin owners as an incentive to keep holding for the long term 'as a reward to holders' and the other half would go into a liquidity pool which is controlled by the developers and encourages people to stop selling their coins, again in return for promoting the long term holders.
However, critics of SafeMoon have pointed out that any stock or coin that tries to stop its investors from selling raises red flags questioning its authenticity in the market and pointed out that SafeMoon might not be a safe option to invest.
''The manual burns, alongside the company having a pretty large stake in the coins, just speaks to me of a manipulation risk. Whenever there's some sort of mechanism to stop selling, that's a bit of a warning sign,'' said Jasper Lawler, head of research at London Capital Group to the Financial Post.
Another celebrity investor, Dave Portnoy, who is the founder of Barstool Sports Inc, announced on Twitter in May 2021 that he purchased SafeMoon coins worth $40,000 but still doubted that the coin could be a ''Ponzi scheme,'' which is a scam technique for early investors to cash out from late buyers and then jump ship leaving them in a limbo and also called it a ''shitcoin''.
"If it is a Ponzi, get in on the ground floor," tweeted Dave Portnoy to his 2.6 million followers and within just an hour, the price of SafeMoon rose 18%. However, it is not knows if Portnoy still holds the coins or has sold it for profits.
SafeMoon at the time of publishing was trading at $0.000002761 and is up +1.15% in the days trade.