Jun 15, 2022 - Economy

A crypto project that promises 300,000% returns

Illustration of a cube with a smiley face and long Pinocchio nose

Illustration: Annelise Capossela/Axios

Some crypto projects make outlandish claims while largely flying under the radar of the press, all the while building up large followings of retail investors organically. Safuu is one such project. It has almost 47,000 Twitter followers, 32,000 Discord members and a claim that it can turn $1,000 into almost $4 million in a year.

Why it matters: Crypto may or may not be key technology for the future internet-of-value, but it's definitely beset with dodgy projects right now. Sometimes it's worth digging into these things so people know the danger signs.

From Safuu's documentation
From Safuu's documentation explaining its fixed APY. Screenshot: Safuu.

The following will present the basic facts of Safuu, but there's more to unpack here, for sure.

How it works: Safuu doesn't really present a problem in the world that it's trying to solve. From its documentation:

  • "Safuu provides a decentralized financial asset which rewards users with a sustainable fixed compound interest model through use of it's unique SAP [Safuu automatic-staking protocol] protocol."

Here's what it does:

  • Safuu is all built around driving value to its safuu (SAFUU) token by... giving away more safuu.
  • When safuu is bought or sold, it incurs a very high fee, 14% on buys and 16% on sells.
  • Those fees get split up between various parts of the ecosystem, all theoretically designed to make the safuu token bigger and stronger.

Every time safuu is bought or sold, 2.5% of the tokens in the transaction are destroyed (or is it 6.5%?). In crypto, this is seen as a de facto redistribution to everyone who holds safuu.

  • In theory, If the supply shrinks, that should redistribute the market cap to all the remaining tokens.
  • In fact, most of Safuu's blog posts are about burning tokens.
  • The advertised return comes from new tokens automatically going out to everyone who holds them, until it hits its max supply of 3.25 billion tokens in 13.5 years.

After initially responding to Axios via Twitter DM, Safuu CEO Bryan Legend never agreed to discuss the project.

By the numbers: Safuu advertises an astronomical 383,000% annual interest rate. To be fair, that's in crypto terms. That said, it does also present those returns in dollar terms in its docs.

  • So a user might actually accumulate 383,000% more tokens in a year, but if their dollar value drops a million percent, the holder is poorer, not richer.

Between the lines: There are 157,000+ wallets that hold SAFUU, according to BSCScan, the explorer for the Binance Smart Chain, where Safuu runs. Lots of these are probably wallets run by companies and insiders, of course.

  • Still, only, 315 wallets have more than $10,000 worth of SAFUU in them. It stands to reason that at least a large portion of those little wallets are regular people.
  • Though it could be that the company has just distributed tokens to thousands of fake wallets that they still control to make it look like they have users.
  • Safuu's Legend did not respond to a question about how many wallets were under the project's control.

State of play: The token has been falling consistently, from $310 in March, down to about $10.58, as of this writing.

  • Neither CoinMarketCap nor CoinGecko provide a market capitalization figure for the coin. BscScan estimates it at around $41 million. CoinGecko's CEO Bobby Ong said that's likely because the project has not supplied it with a way to track its circulating supply.

Of note: The name "Safuu" references the word "safu," which has become crypto-speak for "safe." For example, the Binance exchange self-insures with its SAFU Fund.

What's next: Safuu is developing its own blockchain, so it can port its operations off the Binance Smart Chain onto a space that it controls completely.

Go deeper: The YouTube crypto investigator, Coffeezilla, dug into Safuu, poking at the background of its CEO and looking at where funds seemed to go.

Go deeper