What Is a Honeypot Token? How the Scam Works and How to Check
5 min read · Updated
A honeypot token is a crypto scam where the smart contract allows buying but prevents selling, or makes selling so expensive it is pointless. Because nobody can sell, the price chart only goes up, which attracts even more buyers. By the time people realise, their money is gone.
How honeypot contracts work
Honeypots hide their trap inside the token contract. Common techniques include:
- A sell function that reverts (fails) for everyone except whitelisted wallets
- A sell tax of 90–100%, sometimes switched on only after launch
- A blacklist that automatically adds every buyer
- A "max sell" limit set so low that you can never sell a meaningful amount
- Trading that the owner can pause after people have bought
Why honeypot charts look so good
Normal tokens have both buys and sells, so the price moves up and down. A honeypot only has buys, so the chart is a steady climb with very few red candles. On CoinsWavez, a token with lots of buys but almost no sells triggers the "possible sell restriction" warning.
Which chains have honeypots?
Honeypots are most common on EVM chains, meaning BNB Chain (BSC), Ethereum, Base, Arbitrum and Polygon, because contract code can include arbitrary transfer logic. On Solana, the equivalent risk is a token with an active freeze authority (your wallet can be frozen) or a Token-2022 transfer hook or fee.
How to check if a token is a honeypot
The reliable way is a sell simulation: a tool actually simulates buying and selling the token on-chain and reports whether the sell succeeds and how much tax was taken. The CoinsWavez honeypot checker does this through GoPlus Security and also checks for blacklists, adjustable taxes, pausable trading, hidden owners and proxy contracts.
Remember that a token that passes today can become a honeypot tomorrow if the owner kept control of the contract. That is why "ownership renounced" and "tax cannot be changed" matter as much as the simulation itself.
Quick honeypot checklist
- Sell simulation passes
- Sell tax under 10%, and it cannot be changed
- No blacklist or pause function, or ownership is renounced
- Contract source code is verified
- Real sell transactions appear in recent trades