Mike Alfred, the founding CEO at BrightScope & Digital Assets Data, has described Safemoon and HEX as two ponzi schemes. Alfred made the statement in a post he made on Twitter on June 1, 2022. According to him, the two projects which pose as staking platforms are running ponzi schemes that take advantage of investor funding to be in business.
The post by Alfred says:
“In Safemoon, anyone exiting pays 10% which is distributed to those still in. With Hex, anyone who locks their tokens up for years gets 3%+ as an inflation bonus which is essentially paid by those who doesn’t lock their tokens up.”
Safemoon Pump And Dump
It will be recalled that Safemoon came under the radar of a crypto projects investigator, Coffeezilla, who said that a UK influencer, Ben Phillips. has practically been pumping and dumping the altcoin. Coffeezilla alleged that the Safemoon team is aware that their token was being pumped by Phillips.
The recent post by Alfred is coming amid concerns that HEX and Safemoon might be the next altcoins to crash. This is considering the fact that users of the platform are already complaining of issues of not being able to withdraw their tokens.
HEX’s Certificate of Deposit
In a similar development, the Bitcoin maximalist, Peter McCormack, has advised investors to pull their funds out of HEX, citing the platform’s emphasis on extended staking period, penalties for early cancellation of contracts and the lifestyle of the founder, Richard Heart.
Alfred, in his June 1 Twitter post highlighted that the two platforms are ponzi schemes that differ only in their mechanisms. He maintained that HEX and Safemoon share the same exit door as all ponzi do.
In describing the company’s certificate of deposit product, the HEX website states:
“You can “Stake” your HEX by locking up any amount for a period between 1 and 5555 days. Your Stake accrues rewards every day, and the amount of yield depends on the length of your Stake: “Longer Pays Better”. The APY for HEX Stakes of average length is around 40%, while traditional bank CDs average less than 2%. In addition to the unprecedented yield, there is also the tendency of the HEX price to appreciate.”
In line with the expectation that the value of the token would appreciate, the founder, Heart, on May 1, posted an article titled, “When will HEX reach $1”
— Richard Heart (@RichardHeartWin) June 1, 2022
HEX currently has a market price of $0.06851. The token is down by 13.67% and has a market capitalization of $11.9 billion. It is ranked 201 among cryptocurrencies.
Safemoon, which recently migrated to a new contract is ranked #386 according to its market capitalization of $57 million. The value of the SAFEMOON token is $0.0000001008, down by 6.47%.
According to the Safemoon website,
“The SafeMoon Protocol V2 is a community focused DeFi token that forms part of the expanding SafeMoon ecosystem.”