How Did Safemoon reach a $5B Market Cap within 2 months? Tricky Marketing Strategy (8 min read)
Safemoon - a cryptocurrency built on Binance Smart Chain that addressed the problems of speculation in the space. It quickly attracted over 1 million investors and brought as much as $5 billion of capital.
Strategy & Tools
Safemoon History Timeline
Mar 9, 2021 - Safemoon is released. The trading volume on the 1st day is just around $150k.
- Mar 13, 2021 - Safemoon trading volume already reaches $15 million
- Apr 5, 2021 - first exchange listing on BitMart. It makes the #Safemoon hashtag trending on Twitter.
- Apr 13, 2021 - Dogecoin starts to move the price higher, fueled by Elon Musk’s tweets and WallStreetBets community
- Apr 20, 2021 - a price spike reaching $0.00001399. That is about 700x gain from the initial $0.00000002.
- Apr 21, 2021 - 1 million users
- May 12, 2021 - First data about the market capitalization on Coinmarketcap (CMC), the biggest crypto database. Over $5 billion!
- Jun 6, 2021 - Safemoon is on over 1.5 million watchlists on CMC. That’s about the same as Bitcoin and more than Ethereum, the #2 cryptocurrency
How was Safemoon created – market research
Safemoon creators had definitely started with a solid market research to understand the problems with crypto at that time. Among those, there was high speculation by whales – investors who deal with huge portfolios and the market volatility that they are (partially) responsible for. Such a method gave a solid foundation for the further Safemoon marketing strategy.
Who is behind Safemoon?
John Karony is the CEO of Safemoon. He is a young businessmen with some skills in program management and technical writing.
Product that answers known problems
Safemoon is just what many people in the crypto space wanted - a digital asset worth holding to get high returns in long horizon, without all the hassle of everyday price movements.
Safemoon incentivizes holding by adding 10% fees to those that want to exit the investment. The fee is split between the holders and to add liquidity to the platform. Trillions of coins are destroyed to maintain low supply – this mechanism is similar to share buybacks. It is done manually by the project creators.
Those token economics and mechanisms are designed to make its price go higher – by controlling the supply and encouraging for holding the asset. It doesn’t provide any utility at the time of already high returns, but it seems that it might not be a priority for some crypto investors.
Safemoon crypto success – timing
Timing is hard to control, but it’s essential to business’ success. Safemoon was released at a very specific time in crypto – Bitcoin and Ethereum reaching new highs, along with memecoins like Dogecoin, meme stock activity of WallStreetBets, and other.
Generally speaking, crypto and other assets skyrocketed in prices and most of the predictions expected them to only go higher. Some might say it joined a market bubble and it wouldn’t be so far off the truth – time will tell.
Making it easier and fair to buy
All developer tokens were destroyed (burned) at the time of launch. Acquiring them wasn’t easy to crypto casuals, as it required holding BNB tokens and exchanging them for Safemoon with Pancake Swap.
Listing Safemoon on BitMart made it much easier for casuals who heard the news and wanted to buy the tokens. You can see that while on April 1st the total transaction volume on Safemoon was below $5 million while on April 5th it was already over $43 million. Later on, Safemoon became listed on over 10 exchanges.
Safemoon marketing strategy – Twitter trending hashtag
In April, after announcing and getting listed on BitMart exchange, Safemoon landed among the top trending tags on Twitter which it later repeated in May. Twitter’s trending hashtags always generate more traffic to the subject, which exposed the project to many new investors.
Safemoon crypto success – market movements make headlines
The tokenomics allowed Safemoon price to quickly go up after the release. With over 60,000% return for the early investors, it made it to headlines which brought new investors in and drove the price further up, along with the total amount of money brought to the project.
Billboard teaser campaign – Safemoon marketing strategy
Some of the Twitter users have noticed Safemoon billboards across the US.
The word about Safemoon has been shared by the so-called Safemoon Influencers on Reddit and in other communities. Not only did they talk about the coin, they also launched campaigns on their behalf (without much success, though)
In the crypto space, such community influencers are often picked from the early adopters and incentivized to promote the project by token rewards.
Whenever people who found the project later had doubts, they could join the Discord channel where the developers answered questions on voice chat – which made it less of a no name.
How Safemoon works – is it a scam?
There were some concerns around the Safemoon, to its security as well as its legitimacy.
The mechanism could look like a Ponzi scheme - the project gets value the higher, the more people join in. After they’re in, they are discouraged to leave the investment but they are also incentivized to bring even more people in. That acts as a flywheel that starts the engine and keeps it running as long as it gets the fuel of newcomers, while only the early investors will get the most in return.
Safemoon might or might not be such a scheme. Even if it’s not, it might never reach ‘the moon’.
Almost every project that gets traction in the crypto space is used to perform scams. With Safemoon, that were numerous giveaways that were all over Twitter and also contributed to making the hashtags trend.
The market Fear of Missing Out makes investors jump on skyrocketing assets to catch some of that uptrend. This social behavior boosts asset prices beyond its real value, leading to market bubble occurrences, and it worked similarly in the Safemoon marketing strategy.
Getting the developers to discuss the concerns, not only on forums but in person on Discord voice chat made the project look more authentic – and customers prefer authentic brands to others.
Small and inexperienced investors often fall for get-rich-quick schemes as they look for another type of investment that might change their financial situation quickly.
When people are in doubt of what to do and trust, they look around. Moving large amounts of capital into an investment is often a misleading sign that it’s safe to do so for others. What makes this approach flawed is that it’s all relative – a high-risk investment fund could put a $5 million bet on a new project, but that could be just a fraction of a billion-dollar portfolio. For a retail investor who invests his all savings, the risk is much higher.
Markets continuously swing between greed and fear, which affects the prices from going below to beyond its fair value. That is a social behavior that can be seen across all types of markets while this can be seen especially in crypto as it’s highly dependent of the news and the bullish or bearish moods it sparks.
Window of Opportunity
When building a product, listening carefully to the market can get you great results. Looking around and finding what the market gets and what it really needs might sometimes lead to finding a niche with a high potential to go viral.
Of course, it needs a little help from marketing, and going for incentivizing community members to do marketing for you has proven to be successful in the Safemoon case.
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