Glossary
What is Honeypot?
A honeypot is a malicious token you can buy but not sell, engineered so only the creator can cash out — a common rug-pull scam.
Honeypot contracts hide logic that blocks transfers or sells for ordinary holders — for example a blacklist, a 100% sell tax, or a trading switch only the owner controls. The chart looks like it only goes up because no one can sell.
Defenses: read the contract, check whether ownership is renounced, verify tax rates, and test a small sell before committing. Transparent, verified contracts and renounced ownership reduce the risk.
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Related terms
- Token taxA token tax is a fee the token's contract takes on transfers — a percentage routed to a wallet, liquidity, or burn on each buy or sell.
- Renounce ownershipRenouncing ownership permanently gives up the owner's admin rights over a token contract, so no one can mint, change tax, or pause it again.
- Smart contractA smart contract is code deployed on a blockchain that runs exactly as written when called, with no operator able to alter or stop it.