MoonBull, self-touted as the “best upcoming crypto of 2025,” is stealing the show with its fly plans. Its distinctive 10% fee redistribution mechanism is a feature from Baby Doge Coin (BABYDOGE). On the surface, this seems like a genius plan to encourage early adopters and create an engaged community. Who wouldn’t want a piece of every transaction through their ownership. Hold on just a second there. Have we crossed the line from financial innovation to a potential time bomb waiting for regulatory attention?
Fee As A Security?
That promise of passive income through fee redistribution sure does sound an terrible lot like a dividend, no? And what do dividends usually imply? Ownership. But what does ownership in a profit-generating enterprise under the securities laws often amount to in the eyes of the SEC? A security. Let's not forget the Howey Test. Investors are hoping to earn profits primarily through the efforts of others, namely the developers and promoters of MoonBull itself. This dependence would leave MoonBull dangerously exposed to its 10% fee.
The crypto world has no shortage of cautionary tales that highlight the consequences of projects running afoul of the securities laws. Ripple’s continued impact litigation against the SEC should be a clear beacon. MoonBull has to be particularly delicate, making sure that its fee structure doesn’t use the same move themselves into the fire regulatory attention. Far from enough Just saying you’re not a security is not nearly good enough. They are—if at all—by showing it, in the careful legal structuring of the operations and public transparency in their operation.
Perverse Incentives Run Rampant
Though the seduction of passive income is undeniable for holders, this fee structure builds in a number of surprisingly toxic incentives. A 10% fee is guaranteed to make things considerably more volatile. Imagine large holders manipulating the market to trigger buy/sell frenzies, profiting from the redistributed fees while potentially harming smaller investors.
Consider this: a whale could execute a series of coordinated trades, artificially inflating the price, collecting a significant portion of the redistributed fees, and then dumping their holdings, leaving smaller players holding the bag. This isn’t purely theoretical, as we’ve witnessed the outcome of such a scenario with other DeFi projects that experienced exorbitant transaction fees.
Furthermore, consider the long-term sustainability. Is a 10% fee sustainable? If the value of MOBU plateaus or even drops, will stakeholders still be inspired to continue holding? Or will they abandon ship to greener pastures and higher yields? This may be a precursor to a death spiral, where decreased transaction volume further decreases fee distribution, making the situation worse.
I can already hear the MoonBull maximalists foaming at the mouths just thinking about community and long-term holding. Let's be realistic. In the new wild west of crypto where loyalty is a foreign concept, profits over people are the name of the game.
Small Investors Bear The Brunt
MoonBull’s whitelist system guarantees you “early access at the best price possible,” which sounds tempting. Is it truly equitable? While early adopters may benefit from the initial hype and potential price appreciation, the 10% fee disproportionately impacts smaller investors.
Think about it: if you're buying or selling a small amount of MOBU, 10% is a significant chunk of your investment. Because they are larger investors, transacting in larger volumes, can swallow that fee much more easily than a smaller investor. This ultimately leads to an unfair competitive advantage, tilting the scales toward those with more resources who are better equipped to take advantage of the system.
Further, the commitment to “explosive launches” and “early adopter focus” feels like a setup to a pump-and-dump operation. Whether or not this is deliberate, the current framework rewards short-term profits over long-term sustainable returns. This can cause the unfortunate situation of smaller investors being left holding the bag when all the early investors take their profits.
And finally, I want to make sure to clarify that this isn’t about completely rejecting MoonBull. The notions of community, exclusivity, and strategic investments are deeply true. And honestly, the animal-centered marketing and meme coin aspect, as seen in Moo Deng and others, is tempting to get the headlines. Outside of the NFT realm, Solana as a platform is making quite a stir.
As careful stewards of the crypto ecosystem, we should be wary. Scams like MoonBull could do with our healthy dose of skepticism. We need to take a step back and ask the hard questions in order to avoid unnecessary regulatory flexibility, economic instability, and unintended consequences. The 10% fee redistribution model, though it sounds cutting-edge, would instead likely be a regulatory quagmire in the making.
Before diving headfirst into the MoonBull hype, remember: caveat emptor. Buyer beware. This is not financial advice — this is just a covenant request to encourage a little rational thinking in a market that can sometimes be ruled by irrational exuberance.
