Coindesk - 5/13/2022 3:49:08 AM - GMT (+0 )
The Internet’s detective, Coffeezilla, faces his most unbelievable adversary yet. SafeMoon’s story is so ridiculous that it defies all logic. In his “I Uncovered A Billion-Dollar Fraud” video, Coffeezilla and a group of researchers do their best to figure out exactly what happened in this curious case. Is SafeMoon a rug pull or is it a misunderstood project? Let’s check out the evidence that the detective collected for us.
Not to brag, but Bitcoinist feared all of this from the beginning. In the video, you know everyone involved is in trouble as soon as you hear Jonh Karoni, SafeMoon’s CEO. He describes the project as, “it’s more about building the future and building a safe future and bringing it now.” What did he say there? Nothing, that´s what. And, according to Coffeezilla, that’s what SafeMoon is.Coffeezilla Takes Us To SafeMoon’s Beginning
About the creator of SafeMoon, Coffeezilla says, “It turns out it was a guy who believes in Q. His name is Kyle and very little is known about him, other than he distrusts the government and thinks they’re a bunch of criminals.” And SafeMoon’s origin story starts with a decision from Kyle, “He decides getting into crypto is the perfect way to start redistributing some of that wealth back to himself”.
After a few failled projects, “Kyle found something called Bee token” and decided to copy it. “When Kayle invested in Bee token, he liked that it had a special property to it. A five percent tax on every transaction, which was then split into two parts. Three percent was added back to the liquid pool and two percent was distributed to all the holders of Bee, which just encouraged people not to sell. You just held and make money, and Kyle liked this idea a lot”.
After that, it was time for a fork. “He copied the code and launched it himself, but with a few changes. He raised the tax to 10 percent, and he changed the name to something a lot more catchy. He called it SafeMoon.” This is where the real story starts. Are we talking about a villain or a hero, though?
SFM price chart on GateIO | Source: SFM/USDT on TradingView.com How SafeMoon Became A Billion-Dollar Company
The people couldn’t resist “the promise of safe, easy money,” so, SafeMoon was a hit like few others. According to The Ginger, an ex-SafeMoon moderator, “Kyle told me that he had no idea that SafeMoon was going to explode like it did”. According to Coffeezilla, Kyle “was expecting to be in and out.” What seemed like infinite success changed the plan a little bit.
“Kyle hired a bunch of people almost as unqualified as himself. There’s a guy, Thomas Smith, who became the lead developer (…) After “Papa”, a guy named John Karony is brought on as the CEO of SafeMoon, and he turns out to be the guy in the group project that sort of everyone ends up hating”.
The SafeMoon token was selling like hotcakes, and in 2021, it “really exploded in popularity. They had billboards across the nation. They had the biggest influencers talking about them.” What could possibly go wrong? To answer this question, Coffeezila has to determine how the SafeMoon protocol works. The first thing is to define what a Liquidity Pool is:
“Every pool basically has two different currencies and the point is to provide buyers and sellers a way to trade without regular market makers like Wall Street has. In a liquidity pool the way it works is the ratio of your two assets determines the price.”
That’s standard procedure in DeFi, though. “The key innovation of SafeMoon was this idea that every time someone trades, you just take five percent of it as a tax and put it into the liquidity pool and lock that money up, so SafeMoon the company can’t touch it. That way you know, as an investor, you can always trade SafeMoon for a fair price.” As you might suspect, that didn’t happen.Coffeezilla’s Conclusion
The project’s leaders claimed that rug pulls in SafeMoon were impossible because the liquidity tax is locked up. However, as it turns out, the project that the creators copied was a known scam. “If Bee token could rug pull, that means the funds of SafeMoon are also not locked up, and are also not really safe.” Sadly for everyone involved, Coffeezilla seems to be right.
Find out exactly why in the SafeMoon saga’s next episode. It’s going to be a wild ride.