Hey guys, it's sasha safe moon is a crypto that has exploded since it launched at the beginning of march, and everyone seems to be talking about it. We've got fortune the wall street journal and everybody else talking about it, but sadly the journalists missed out one critical aspect: safe moon is a ponzi scheme, but seeing as i've already said, that and i've had over 5 000 people leave a comment saying that they disagree. I thought i need to explain it in a bit more detail, because previously i only scratched the surface and i intentionally kept the videos relatively light, but people wanted more detail so here it is. I am going to explain the maths behind why safe moon is a ponzi scheme.

If you are here to leave a hateful comment. Tell me that i look ugly or hit the dislike button feel free to go and do that. But if you are invested, i completely get why you might not want a negative press. I completely understand, but just give me a few minutes of your time, and maybe you will learn something new about how it actually works, because that's what i'm here to explain.

I'm going to explain exactly why the whole tokenomics aspect of safe moon doesn't actually work. So, let's start with the basics. Here is what happens with every safe moon transaction where safe moon moves from one address to another. The seller has to pay a 10 fee and that 10 is split.

Five percent of it goes to redistribution and five percent goes to the liquidity pool. The liquidity pool is then split with half of it. Staying a safe moon and another half being converted to bmb. So that's 2.5, each of the total transaction volume.

The redistribution is also split at the moment. Roughly 41.6 percent of all the tokens that are in existence have already been burned, and that means that roughly 41.6 percent off the five percent, so 2.08 of the total transactions are being sent to the burnt wallet. So in essence, they are being burnt. The remaining 2.92 percent is evenly distributed between the holders, depending on how much they actually hold now, because of that 10 feet.

Safe moon is not actually designed as a method of transacting value. Like normal currency, you don't want to go and use safe, moon to go and buy something in a shop, because you're gon na have to pay a 10 fee. That is extremely expensive. You can pay for things using things like dollars without having to pay anything close to that.

So that means that almost a hundred percent of the transactions that will be in existence today are existing holders of safe moon selling. Out of their positions to potentially you know, capitalizing their gains either to new buyers into safe moon or to existing holders who want to increase their positions. That is what the transactions that are happening are going to be doing now, every time that you sell safe moon, you will have to pay that 10 fee and if you want the value of your savement to increase to offset that fee, there are only two ways In which that can happen, the first one is through reflections that happen through the protocol and i'm going to explain a lot of detail and the second is through the price going up and there are two different ways in which that can happen now. First, let's talk about reflections because that's the one piece that everyone seems to be very excited about and that's the one piece that they tell me that i never understood in the first place.

So, let's assume that i go and buy a hundred dollars of safe moon and for the sake of simplicity, let's assume that the price of safe moon is 0.0001. That's a little bit above where it is at the moment, but let's just keep the numbers easy. So for my 100, i am going to get 10 million tokens now. Let's say that i want to go and sell my tokens or i want to then go and buy something for a hundred dollars.

In order to do so, i will have to pay a 10 fee, so in order to get my hundred dollars back, i need to actually increase the value of my save mone up dollars to 111.11 cents in order to pay my 10 fee and bring it back Down to 100, so i need to earn 11 and 11 cents just to break. Even so, let's assume, for the sake of this argument, that the price does not go up and stays flat. Can you make the 11 11 cents through reflections on their own? Well, if you own 10 million tokens - and there is one quadrillion tokens in total, including the 416 trillion that have already been burned - that means that when a reflection happens, your share is going to be 10 million over one quadrillion of the total reflection amount. So that's 0.0001 percent, so to get 11.11 cents through reflections, you would need to collect 1.11 million tokens and those tokens will be that 0.0001 percent of the total reflected tokens.

Because that's your share of the total number of tokens, so you would need to have 111 trillion reflected tokens in total and because reflected tokens make up only five percent of the total transaction amount. That means there needs to be 2.22 quadrillion tokens worth of transactions before you break even that's roughly four times the total number of save mean tokens in existence at the moment, excluding the burnt ones because they can't transact. So, given that most people are holding apparently and a big chunk of the total tokens are actually sitting with the developers, it is going to take a long time to get that money back through reflections alone. So the other way that the money can be earned is by the price going up right and there are two ways of doing it: either the price goes up because there is increased demand from new people buying in i'm going to get to that in just a Bit or the natural order of things because tokens get burned, the supply reduces and that increases price.

That's the alternative way that people explain this right. Well, let's do the maths on that as well. So at the moment there are 584 trillion safe moon tokens that are not yet burned and you want to go and have the price increase by 11.11 percent in order for your hundred dollars to break. Even so, let's assume this is not a ponzi scheme and then the price rises only because of the reducing number of tokens, not because more people are joining in and thereby artificially pumping the price.

So if you assume that the demand is constant, we need 10 of all the existing tokens to burn in order for the price per token to increase by 11.11. So that means that we need 58.4 trillion tokens to be burned for you to break even on your hundred dollars and remember that at the moment two point: zero. Eight percent tokens are burned from every transaction. However, as more tokens are burned, the percentage that gets burnt actually increases because the burnt wallet is increasing as a proportion of the total and therefore it accrues more of the reflections and i do get that.

So if you were to burn 58.4 trillion tokens, then the average contribution to the burnt wallet will actually roughly be 2.23 from the position. It is today so to burn that many tokens. We would need the total number of transactions to be 2.6 quadrillion or roughly five times the amount of safe moon tokens that are left at the end of this process. So i went and looked and over the last few days the daily transaction volume has averaged at around five to six trillion tokens, so it will take roughly 520 days of waiting before i can sell my safe moon and not make a loss.

That's about one and a half years and the volume of transactions over time doesn't actually increase because more people hold wallets are lost, safe moon is burnt. Presumably the price goes up. The actual volume in terms of tokens typically will stay flat. If you look at bitcoin over the last 10 years that stayed largely flat as well, so unfortunately, you can see that the only way that the price of safe moon can go up is through the demand for it increasing.

So more people need to buy into the token to keep the price stable or make the price rise, but, unlike other types of asset, there is only one reason why somebody might want to buy into safe moon. That reason is to buy it at a particular price and then wait until more people join in and then be able to sell it at a higher price. Therefore, earning you, a profit right, safe moon itself does not generate any kind of revenue or profit like a company would, if you were investing in a company through shares statement, also has no utility other than the rising price that i just mentioned, because it can't really Be used for transactions because of the incredibly expensive fee, so i hope you can see exactly what is happening after i've explained everything here and exactly why. I am saying that safe moon is a ponzi scheme.

Its price growth relies on a large number of new people joining fast, and that is the only mechanism through which the price can actually go up, and eventually the number of new people joining will drop below the critical level that sustains its price and grows it. Because there is a limited number of people and there's a limited number of people who are interested in investing in this type of asset, and when that point is reached, the price will stop increasing at a rate where people are quickly doubling their money or increasing it. And in fact, a lot of people at that point will begin having to wait just to break, even because they have to pay that fee when they sell. And then some of those people will choose to begin selling their safe moon at a slight loss because they want to take the money out because they're seeing that it stopped rising and they want to go and put that money somewhere else or do something else with It and because that selling pressure would begin, the price will begin dropping as more and more people are realizing that they need to sell in order to get the money out, and that will cause the price to drop even further.

And that is exactly how a typical ponzi scheme of this type actually ends up collapsing in the end. I really hope that you realize, after this explanation as to exactly what's happening here and before even more people are drawn into this. This is not a game. This is extremely serious.

A lot of people are going to lose a lot of money. Sure you might only have a small amount invested, but the amount of hype and the amount of talk about this has led to a lot of people investing money into it that they will end up losing. I hope you found this useful. Thank you so much for watching.

I really appreciate it and, as always i'll see you guys later, you.