Honeypot
A honeypot is a token or smart-contract setup that allows people to buy but prevents or severely restricts selling. Buyers' money flows in, but only the creators can get it out.
How a honeypot works
The scammer deploys a token with hidden rules in its code and creates a liquidity pool on a decentralized exchange. Buying works normally, so the chart rises and the token looks popular. When ordinary holders try to sell, the transaction fails or the contract takes almost all of the proceeds as a tax.
Common tricks include a blacklist that blocks sellers, a sell function that only the owner's whitelisted addresses can use, a sell tax the owner can raise to near 100 percent at any time, or trading that the owner can pause. Eventually the creator sells their own tokens or removes the liquidity, and the price collapses.
An example
Say you spot a new token whose price has risen tenfold in a day and buy 200 USDC worth. A few hours later you try to sell. Your wallet shows the transaction failing again and again, or a sell goes through but returns only a few cents. Meanwhile the chart keeps climbing because nobody else can sell either.
Warning signs
Only buys and no sells in the trading history. A contract source that is not verified on a block explorer, or one with functions such as blacklist, setFee or pause controlled by the owner. A token pushed through unsolicited messages, fake airdrops or hype groups promising fast gains. Tokens that copy the name of a well-known project but use a different contract address.
Protecting yourself
Check the contract address on a block explorer, look at whether other wallets have sold successfully, and treat token-checking tools as one input, since honeypots are designed to evade them. Only buy tokens whose official contract you have confirmed from the project's own sources. If you are already stuck, do not pay anyone who promises to unlock your tokens.
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Frequently asked questions
Can I ever sell a honeypot token?
Usually not, or only at a near-total loss. The restrictions are written into the contract and controlled by its owner.
Are honeypot checkers reliable?
They catch many known patterns but not all. Some honeypots allow sales at first and only switch on restrictions later.
Is honeypot also a security term outside crypto?
Yes. In IT security a honeypot is a decoy system that lures attackers. Crypto scammers adopted the word for tokens that lure buyers.
Related terms
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