Learn from Safemoon - How to spot an altcoin scam

We know the majority of altcoins are legit scams but to many it might be difficult to know how to figure out whether a project is indeed nothing more than a pump n dump scheme. Hence its worth doing a quick case study of Safemoon and people will hopefully learn from it and use that experience to avoid shitcoins in the future. I took a look at Safemoon so you don’t have to. Let’s dump right on in:

So what is a Safemoon exactly? Safemoon launched this March with a circulating supply of one Quadrillion. What’s it’s purpose you may ask? Nothing is the answer. Even now, reading their website makes the scam very obvious in my opinion. The front page lists three “Functions” or features if you will: dev team burning their tokens, rewards for holding and trade fees that enrich holders. There’s no utility here, just incentives for holding the token in order to drive the price up. The same goes for the so called whitepaper. It’s 4 paragraphs long and has some lovely quotes such as the one that argues manually controlled burns of tokens is a great way to reward the community.

Red flag #1: No specific use case except pumping the token value.

The circulating supply of one quadrillion might sound laughable to begin with, but add that with repeated manual burns. They’ve burned 400 trillion coins already, in a pretty obvious attempt to pump the price.

Red Flag #2: Token burns with no other purpose than to pump the price.

A key “feature” of Safemoon are the ludicrous fees in order to sell it. If you sell Safemoon you pay a 10% fee with 5% going to existing holders, the other 5% being added to liquidity pools. Security platform CertiK did an audit and found serious issues.

Red Flag #3: Built in mechanisms with the only purpose being to reward holders and penalize sellers.

My most important indicator follows. Safemoon launched in March and you’d assume development would be thriving with Safemoon being the best thing since sliced bread. Let’s check out their GitHub repos. https://github.com/Safemoon-Protocol

They essentially have one crypto related repo and that’s the Solidity smart contract. It basically has one commit and no activity since May. Other repositories include two Discord bots with one of them being for a Minecraft server. The rest of the repositories are forks from PancakeSwap with no commits.

Safemoon devs are promising a blockchain and wallet at some point. Guess time will tell, but the last well known closed source blockchain project to exist was Bitconnect.

Red Flag #4: No development activity. Lots of forked repos with no own commits, more effort put into Discord bots than crypto related code.

I could go on. Look at the people behind Safemoon and their social media presence, look at discussions around the project and see if any of them talk about any technical aspect or if it’s all just about price speculation. Scratch the surface and you’ll often find an answer very quickly on whether or not this is a legit development team working on something that can change the world. Evaluate the decentralization aspect of the project. Safemoon is the opposite of decentralized with the development team being in full control of the supply mechanics, and even touting it as something positive. Look at who is supporting this project. In the case of Safemoon it’s basically a few influencers (probably paid for or attempts to capture quick gains.).

The next time you buy a new coin, take a few minutes to do some basic research on the marketing as well as the technical implementation. Scams are often quite easy to spot. The number of shitcoin popping up, especially in a bullish market is staggering. Don’t put your money into a pump and dump scheme designed to enrich the team behind it as quickly as possible.

I’d argue that any project that isn’t fully open source and decentralized is something you should stay far away from.

By spending a bit of time researching a project before you put your money into it you might invest in something that benefits the entire crypto space instead of degrading it. $100 dumped in a shitcoin is $100 that does not go into something that actually builds the future of financial freedom.