Is Safuu the Most Interesting Project in Defi?

Safuu (Sustainable Asset Fund for Universal Users) bills itself as the highest auto paying and compounding protocol, with an APY of 383,025.80%. Safuu competes with the likes of Titano and Libero. Safuu is an auto-compounding rebase token that pays interest every 15 minutes. All you have to do is buy and hold it in your wallet and you receive interest.

The selling point for this class of tokens is the high interest rate and automatic compounding. Investors who hold the token can see their balances grow exponentially in a short time. A thousand dollars invested in Safuu on day one would grow to $3,830,454 in a year, assuming no change in price. However, tokens have to be minted to pay the high interest rates, which increases the supply. Economics tells us that when supply increases, prices fall, and this is exactly what has happened to these tokens. All of them have had dramatic price decreases. A fall in the broader crypto market has not helped. The $3.8 million SAFUU promises is not achievable unless the price recovers.

At approximately $16 at time of writing, Safuu is down around 95% from its all-time high of $310 achieved shortly after launch. For an investment in Safuu to be profitable the interest from rebasing has to be large enough to offset the price drop. But is this possible? This is not an easy question to answer. It all depends at what price you buy, your actions and price changes after buying.

Safuu Price Chart from Coinmarketcap.com

I bought into Safuu at a price of around $150. I let it compound for about a month before I started withdrawing. I was withdrawing at around my entry price before the price cratered. I have done a combination of compounding and withdrawing since, and even with the lower price I have recouped my initial investment and still has a decent balance in my account. The power of compounding was enough to offset the price drop. My strategy going forward is to mostly compound since I want my balance to grow in preparation for the launch of SafuuX. Which brings me to the reason I believe Safuu could be one of the most interesting Defi projects around.

Safuu is developing the world’s first auto-rebasing Layer 1 blockchain. If you are in the Defi world you know that most Defi projects are smart contracts built on other blockchains. Safuu itself is built on Binance Smart Chain. The Safuu team is trying to flip that model by being the first Defi project with its own blockchain that pays a high-yield interest. Other developers will be able to build projects on Safuu’s blockchain, which will be called SafuuX. It is slated for launch in January 2023. This could be a game changer not just for Safuu but for the Defi world in general, as it removes dependence on other blockchains, creating a truly decentralized protocol. If it is successful, other Defi projects may follow suit. This could create a cascade of Defi projects creating their own blockchains (do I see a DRIP blockchain in the works?), and pushing Defi growth even faster.

SafuuX will yield an APY of 191,888% for the first eight months after the blockchain is launched, after which the yield will be variable, with the rate dependent on transaction fees collected from users.

Prior to launch, there will be a one-month sacrifice period running from October to November, where investors can contribute Safuu and other tokens to receive SafuuX coins at up to an 81% discount. Those sacrificing Safuu will get the highest discount. SafuuX coins will be available to investors upon launch in 2023.

The cryptocurrencies with the biggest market caps are those with their own blockchains. These all had parabolic rise in prices after launch. The performance of these blockchains does not mean that SafuuX will follow the same trajectory. There is no denying though that the unique nature of what Safuu is trying to do could attract many investors. It will be interesting to see if there will be a run up in Safuu’s price when the sacrifice period nears, similar to what we saw happen to HEX when the sacrifice period for PulseChain approached. Only time will tell, but if the same enthusiasm is generated, we could see a parabolic rise in Safuu’s price.

As Defi continues to evolve, we are seeing many innovations in the space. Sustainability is the bane of most Defi projects, and no one has figured out a way to do Defi sustainably. Safuu developers creating their own blockchain is another stop on the way to finding the holy grail in Defi — a high-yielding, sustainable project. Imagine a project paying one or two percent a day with a sustainable token price. This would be the path to financial freedom for the masses. Believers like myself think this will happen eventually. My crystal ball has not told me when though. I will be watching Safuu very closely to see how it plays out. Safuu’s price is at historic lows, so now might be a good time to buy for anyone considering it (not financial advice). Time will tell, but Safuu could turn out to be one of the most interesting Defi projects of 2022.

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This article is for information and educational purposes only, and nothing stated herein is to be construed as investment advice. Neither the author nor the publication takes any responsibility or liability for any investments, profits, or losses you may incur as a result of this information. Please do your own research and due diligence before making any investment decisions. The author has made every effort to ensure accuracy of the information in this article, but makes no representations or warranties, expressed or implied, to its accuracy, completeness, timeliness, or correctness. The author may own cryptocurrencies discussed in this article.

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jaycesondon

Accountant (CPA), equity research analyst and crypto enthusiast.