3 Serious Answers for the Financial Analyst 🙌🏻 #HODL #SAFEMOON

in #safemoon3 months ago

I saw this post on This Reddit and couldn’t post my comment due to character limit. So I’ll try to address the questions here. 🔽

*Logos: I want to believe that demand for SafeMoon will continue growing, but screaming "diamond hands" in response to every serious question regarding economic fundamentals will generally turn away more investors/speculators than it will attract. I've done plenty of research, but I've still come up with a few nagging, nuanced questions that I'd like to toss into the group for thoughtful discussion.

🤓My thoughts on this: “Diamond hands” ✋ 💎 ✋ is an approach to a market 2.0 model. If you are stuck on the old world approach of “trading in and out of positions” to make a quick profit and not caring what happens to the other guy (like classic wallstreet) then Safemoon wouldn’t be the right investment vehicle for you. Safemoon is the new world model where there’s a collective understanding and respect for “holding” and “diamond hands”. This is a fundamental change in psychology and behavior in respect to the Safemoon architecture. There’s a paradigm shift now that has people coming together wanting a bull run asset rather than an asset that is engineered to be able to be shorted or manipulated (like every other asset class we are accustomed to). We have learned that the shorting only helps the (insiders) and that’s why they love the way the system is set up currently for traditional financial markets.

📛Q1. If 41% of SafeMoon is currently sitting in the "black hole" burn wallet, isn't the true market cap always technically 59% (or 1 – burn %) of the stated market cap on bscscan? (e.g., a $5b market cap is really only ~$3b).

This matters because instead of bragging about an inflated market cap to the world, we should probably be letting people know that the coin is smaller than it appears, and hence they are getting in sooner than they think. Market cap is more important than price to a trained eye, so smaller market caps are actually stronger incentives to a careful speculator (like myself).

Also, acknowledging this would raise the realistic upper-bound on SafeMoon as a whole. A $1T nominal market cap is really only ~$600b in circulating tokens.

❇️A1. No, it’s not only worth 59% or over inflated because you can say the same exact thing about Bitcoin - because there are billions of dollars locked that will never be cashed out so this rises the bottom of Bitcoin naturally. But no one goes around saying Bitcoins actual price is xxxx vs yyy. In every asset class you will have holders who have forgotten about their asset, or died and left their asset unclaimed etc this is a GOOD thing because it elevates the floor of the asset and provides liquidity that will never be cashed out. This is why Bitcoin will never go to 0 because it’s fundamentally impossible. A person who can access their wallet and create a sell order can cash out but a person who lost their private key or died and has Bitcoin sitting in a wallet will never be able to create a sell order on that ever again and it will only provide a floor.

📛Q2. What is the dev team's true endgame in designing a deflationary crypto?

Fixed quantity cryptos operate like commodities and are therefore useful when used as extremely efficient alternatives to "old world" speculative assets like precious metals and classic cars.

Inflationary cryptos are useful when used as domain-specific, pseudo-currencies tailored to internet subcultures which (poorly) self-regulate price fluctuations by slowly devaluing themselves over time either by minting and/or mining without the need of a central bank.

But deflationary cryptos? The only use case I can think of is a glorified lottery.

Don't get me wrong—I like making money. Governments shouldn't be the only ones allowed to profit on human greed. I'm totally in favor of a decentralized lottery, but let's call it as it is.

Everyone here keeps repeating the party line that we will "change the world" with this token, but how does anyone expect this token to be the backbone of any economy, African or otherwise, if the tokenomics literally destroy, ad infinitum, the very currency we claim will soon bolster those future economies? Central banks exist for a reason: true currencies need to shrink and grow in response to shifts in demand in order to maintain stability.

By no means is this FUD because lotteries constitute an extremely successful business model which generate billions upon billions in revenue annually, so buying shares in a privatized lottery pre-IPO would be a very smart investment in my eyes. But this lottery only pays out as long as there are more long-term bulls than there are long-term bears, and humans are notorious for having short attentions spans.

❇️A2. It used to be that wallstreet traders can hop in and out of a position with zero penalty. With Safemoon you have (redistribution, tax and value locking) so your departure just made it more expensive for you to get back in later. If people are coming into Safemoon with the wrong mindset (like all people are out for themselves or I gotta just get mine while I can etc) then they are going to be in for a rude awakening because they are trying to fit the old world shady practices into the new world way of incentivizing “bulls”.

Inflation is NEVER a good thing, ever. Governments, banks and corrupt institutions would love for you to believe the myth that inflation is good or “ok” but all inflation is, is slippage on the value over time of your asset. Inflation is a tax on your gains or a diminishing of your buying power. Inflation is great for corrupt central banks, politicians and those that take value from the monetary system and have to “make up for the theft” by inflating everyone else’s asset as they take more of that asset for themselves to always be ahead. This is their tried and true plan and they love it, but it’s not good for the asset holder - or the rest of us.

We don’t “need” central banks, they need themselves if you create an asset that is only a bull asset then you have created an asset that steps to the rhythm of life. More people are born, get in, add to the pot and over time the asset rises (not drops) and those with the “diamond hands” are rewarded, some people die, their holdings remain and life keeps moving forward. Even if Safemoon went to $500, then the mechanisms in place would ensure it goes to $1000 over time. This is because as long as there’s value locked that can’t be taken out, ever then the floor keeps rising. You will never have a shortage of buy orders because it plays on the psychology that people will put in more because they want more, but you will also have people selling when they feel they have made enough to live comfortably and pay the tax to leave the game.

📛Q3. How does this community plan to increase demand quickly enough to combat sell-offs by massive whales? Beyond spamming Twitter and diddling in the echo chambers that are Discord and Telegram, are we now relying solely on the dev team and their billboards to carry the weight? As was made painfully obvious today, rockets don't always go up forever. Additionally, PAST BULL RUNS DO NOT GUARANTEE FUTURE BULL RUNS. Enough with those screenshots of previous dips, please and thank you. Gambler's fallacy, anyone?

❇️A3. In the beginning it’s not as expensive for people to sell and exit the game because whales are condensed at the top and there’s only a handful, however over time the whales will be liquidated (as we have already seen) and you will have baby whales but a lot more of them. The difference between this and you average stock is that when you exit your position in the stock market, you aren’t giving your shares back to the community for leaving. You aren’t leaving anything of value, you are just taking value and offering nothing in return.

The best way to explain this is to say you have Airbnb rental. Pretend you make an agreement that you will rent your room out cheaper than any other rental in that area but the only catch is, is that every renter has to leave a new dish, or fix something, or leave a surfboard, or mow the lawn, or do repairs etc. The owner may be getting a little less money, but over time there’s a huge investment of people “leaving rewards” as they exit their positions or depart the rental - hence bringing up the value of the asset. This type of framework has never actually been modeled in any current financial asset. As time goes on, exiting a position just gets that much more expensive.

Whales hurt us in the beginning, but they also help us because they are just literally giving away money to provide a higher bottom floor.

✍️P.S. Doge and GME stock for example have tested this new world way of thinking and proved it to be useful and effective, however their tokenomics are just mirroring your average “stock” because at the end of the day, the long term holders aren’t rewarded, nothing is contributed back to the community after exits and it’s literally just a mirror of some stock getting a lot of attention. Eventually, over time there would be a bust because there are no mechanisms set into place that incentivize and contribute back to the community after someone exits a position.

We have now merged the power of social unity with the power of a true deflationary asset class with incredible mechanisms that reward long-term holders - or “diamond hands”. I’m pretty bullish on Safemoon if you haven’t noticed. 😁

Give a shout out to author on: https://www.reddit.com/r/SafeMoon/comments/mwvfw2/3_serious_answers_for_the_financial_analyst/