SafeMoon Rug Pull: Fraud Prerequisites
New projects are popping up in the DeFi world every day. And many of them gather large communities around them in a short time. SafeMoon has recently become one of these projects. In just a couple of months since its inception, its market capitalization has reached $ 4 billion.
The overwhelming popularity of SafeMoon has been the most talked about topic in the cryptocurrency world lately. However, this does not make it a must for most investors. Since this is a new form of cryptocurrency, investors should always be prepared to lose every dollar invested.
Despite its name, SafeMoon has been noted by crypto experts as a possible Rug Pull.
Rug Pull is malicious manipulation. They consist in the fact that the owners of the project can refuse the assignment. They often embezzle investors’ money, saying that some programmatic issues supposedly need to be corrected.
That is, investing in a token is unsafe.
It is possible to identify the main prerequisites for fraud in the new project. So the SafeMoon Rug Pull prerequisites include:
- The owner has more than 50% liquidity. Those can create shake-ups and hype around the token at any time.
- SafeMoon’s official website is often down. Token founders participate in Q&A sessions to reassure investors. However, it is essential to remember that scammers usually use this strategy to keep people in the project.
- John Caroney is the founder of the project, and his persona is questionable. In his own words, before taking up the cryptocurrency, he worked as an analyst at the Pentagon for over six years. But cannot verify this information through open sources.
- Dramatic jumps in the value of a token are like a way to attract more investment to your project.
- SafeMoon has issued one quadrillion tokens. The size of the SafeMoon token edition should be a wake-up call.
- SafeMoon charges a 10% commission on every transaction, 5% is distributed to all investors, and the remainder is burned. This mechanism should convince users to keep their assets.
- After a while, the usefulness of SafeMoon is still unclear, and its long-term goals are just as vague.
As you can see, the SafeMoon crypto token has many prerequisites to be a Rug Pull.
Such projects are similar to pyramid schemes. Those at the bottom of the pyramid can earn a little, but the founders receive the main profit. Those at the top also suffer the least when things fall apart.
Also, let’s not forget about the potential damage that such issues of coins and tokens cause. They undermine the positive reputation and integrity inherent in genuine cryptocurrencies, such as Bitcoin (BTC) and Ethereum (ETH).
Carolyn Coley is a blockchain reporter. She joined Smartereum after graduating from UC Berkeley in 2018.
OhNoEthereum via https://www.ohnocrypto.com/ @Carolyn Coley, @Khareem Sudlow