Have you heard of SafeMoon’s Burn Rate? SafeMoon cryptocurrency is a community-backed crypto asset that launched in 2021. It has seen massive growth, especially in its community. David Portnoy was one of the high-profile figures to back SafeMoon publicly. Throughout the year, SafeMoon developers have continued to push out updates. They also maintain constant contact with the community through #SafeMoonSundays.
What is a Deflationary Cryptocurrency?
SafeMoon is a deflationary token. Some might even say it’s a hyper-deflationary token. This means that SafeMoon token supply constantly reduces with every buy or sell transaction. For example, Ethereum just became a deflationary token after it had its first negative issuance. That means that the amount of ETH entering the market is less than the amount leaving. The EIP-1559 updates added this burn mechanism to the Ethereum mainnet as it nears becoming fully Proof-of-Stake.
For SafeMoon, the token has a tax system. Every transaction is taxed 10%. Long-term holders of the project get rewarded from this tax system as well. 5% goes to SAFEMOON/BNB liquidity pool, while the other 5% is distributed among SafeMoon holders. SafeMoon has over 2.5 million holders, which is a pretty decent community.
SafeMoon Burn Mechanism and Rates
The project creators manually burn SafeMoon tokens occasionally to reduce the supply. In the last seven days, SafeMoon burns have had an average of $7000 worth of tokens per day. At that rate, it may take another 64 years to burn all the SAFEMOON tokens fully. However, this is only theoretical and depends on token usage and trading.
According to SafeMoon Burn, a website for tracking the burning of SafeMoon tokens, the SafeMoon team removed about 142 million tokens from circulation every minute. This translates to 24 billion SAFEMOON every day. So far, out of the 100% total token supply, 42% has already been burnt. At this rate, in another year, SAFEMOON might experience a supply shock. SafeMoon burn removes the selling pressure on the price of the token. Hence, the value of the token can sail up more fluidly.
In other news, the team has announced a V2 update on their Twitter account. In this update, the SafeMoon burn mechanism will pick up from where it left off in V1. This V2 update comes with a 1000:1 consolidation ratio, meaning the total supply will no longer be one quadrillion but 1 trillion. It also means that if you have 1 billion SAFEMOON tokens in V1, then in V2, you will have 1 million tokens. On top of that, the SafeMoon team will release a new roadmap with V2 in mind.
SafeMoon Promises a Bright Future
SafeMoon developers want the best for their community. This 1000:1 consolidation will pique the interest of new investors. For many investors (usually old school ones), a sizeable circulating supply is a no-go zone. Perhaps this is why the SafeMoon team is implementing this version 2 (V2) update. Only time will tell.