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Safemoon is a ponzi scheme

This is Bitconnect, all over again.

This is Bitconnect, all over again.

Safemoon is a Ponzi. It is explicitly designed to be a pyramidal scheme. They admit so on their website if you actually can get through their complete and utter joke of a whitepaper. In that “whitepaper” that I would use as toilet paper, there’s an image of an astronaut on the moon.

So, let me now dispel any doubt that it is quite literally a Ponzi in smart contract form.

First, let’s define a Ponzi scheme. From Wikipedia:

a form of fraud that lures investors and pays profits to earlier investors with funds from more recent investors.[2] The scheme leads victims to believe that profits are coming from legitimate business activity (e.g. product sales and/or successful investments), and they remain unaware that other investors are the source of funds. A Ponzi scheme can maintain the illusion of a sustainable business as long as new investors contribute new funds, and as long as most of the investors do not demand full repayment and still believe in the non-existent assets they are purported to own.

Now let’s consider safemoon’s “tokenomics.”

If you read their “whitepaper” on their website. They state the only revenue generation of the token is the 5% “fee” that is distributed to everyone from every transaction of the token.

Another 5% goes to the liquidity pool on Pancake swap which they claim is to keep a “price floor”, this is mostly irrelevant to the explanation, but it helps aid the scam by maintaining liquidity since the coin relies on people buying it. (And it also gives it a veneer of authority as I suspect a lot of people have no clue what a liquidity pool is.)

They also claim there is a “burn wallet” which the developers admit they will only manually burn (i.e., they don’t have to burn shit) as they see fit for the health of the token. (lol). Finally, their website explicitly encourages you to hodl your tokens so you continue to reap the 5% transaction fee from all the other people transacting the token.

The name itself should have been enough of a red flag

Safemoon and these other coins have 1 wallet with more than 50% of the coins. You will see a hoard of fake users/profiles just trying to promote it. These coins have no utility, it is just a Ponzi scheme with the entire idea being that people who come in last are gonna be bag holders and everyone below will make a portion of the bagholders investment if you bail out early before the rug pull. These people are trying hard to get you into Safemoon because they wanna hoard more money and they don’t give a f**k about the people who are gonna be bag holders in the end.

There is no other use of the token. None.

It is purely by the developer’s own admission a smart contract designed to take money from someone buying or selling the token and give it to you. Or, to use the wiki definition, a new and advanced means of “pay[ing] profits to earlier investors with funds from more recent investors.”

So, we have all the basic conditions of a ponzi, right there in the white paper:

  • revenue generation from the token is entirely dependent on people buying more of the token;
  • the longer you hodl, “the more you make”;
  • irrespective of how markets affect price, there is zero revenue generation if people stop transacting with the token, and
  • you are discouraged from selling the token by earning fees and being taxed on your way out (like in a traditional Ponzi, where you’d be discouraged from ever cashing out as that would collapse the whole scheme).

Keep in mind this is separate from just speculating on the price

Every token has that component, but most tokens at least pretend to serve some sort of function irrespective of just speculating on the price. A token’s purpose could be as simple as a digital trustless means of transacting in some form of currency as an alternative to fiat. Safemoon does not even pretend to be that.

I also occasionally see posts where they claim this is not a Ponzi because old and new investors alike make money from the fee generation. This is simply a function of the way a smart contract Ponzi can work, though. In a way, it is a technical advancement in ponzi scheming, if you will.

Please be careful out there

Old AND new investor transacting can add money into the scheme to satiate bag hodlers, you don’t just need new suckers, you can live off a combo of new suckers and bag holders transferring funds or selling (as long as they are not collapsing the price) since everyone’s transactions are contributing to the Pancake liquidity pool which can theoretically provide a constant market, even if no one new enters the scam.

That’s it. I suppose this is also useful to new people in the crypto scene. If you actually try to understand a token’s stated purpose, it can be clear that a given token is in fact a scam without doing any other research.

I don’t want these shit coins to be the face of crypto for all the newcomers. Stop promoting/getting into these scam coins for a quick buck, it is just gonna give crypto space a bad name.

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