Safe token drops 42% after enabling transfers

After unlocking the transferability of its tokens, the price of Safe token’s plummeted by 42%, going from $3.26 on the day of the unlock to $1.88 on April 30. 

Safe's token contract was unpaused on April 23, enabling holders to transfer their tokens. These tokens had been locked for two years following the decision of the project’s decentralized autonomous organization (DAO) to implement the lock in 2022.

This follows a vote from SafeDAO over a token transferability proposal that saw 99.1% of participants voting to ratify the proposal.

A Safe spokesperson told Cointelegraph that the DAO delayed releasing the tokens to “allow for progressive decentralization.” The DAO collaborated on a roadmap to cover different areas like governance processes and resource allocation. This allowed the community to ensure these areas were mature before unlocking its tokens.

The spokesperson said that the proposal to enable token transferability was only put together after the milestones set by the DAO were achieved. They wrote:

Unlocking SAFE token brings more utility to the Safe ecosystem, powering the movement for better user experience through smart accounts. This milestone marks the beginning of a new chapter in the journey to making digital ownership easy and accessible.

Despite the lack of token transferability and the crypto winter, the Safe team claimed that its user base grew by 22 times. The spokesperson also said their team secured $100 billion in assets and saw 7.5 million accounts created.

Even though the ecosystem experienced significant growth, the token’s price experienced a massive drop after the DAO enabled token transferability.

All-time price chart for the safe token. Source: CoinGecko

According to coin information website CoinGecko, Safe traded at $3.26 on April 23. At the time of writing, the token hovers at $1.88 a piece. This represents a 42% drop since transfers were enabled.

After enabling token transferability for the project, the Safe spokesperson said that the project is looking into building the internet’s ownership layer, where users will have control over their data, identity and assets within the Web3 space.

The spokesperson said they will implement native integration for layer-2s to increase scalability and cross-chain functionality with network abstraction. It will also create community activities for its ecosystem.