Overview
A honeypot is a contract designed to trap funds, typically preventing users from selling a token they purchased. Buyers can buy but not sell. It is a common scam in token launches.
How It Works
The contract allows buys but blocks sells through hidden logic, such as transfer restrictions or blacklists. Investors see gains on paper but cannot realize them. The trap is often combined with social promotion.
Why It Matters
Honeypots exploit the opacity of smart contracts and investor FOMO. They are a major risk in low-quality tokens. Using audit tools and checking contract code can help avoid them.
Related Concepts
Honeypots are a type of Smart Contract scam, related to Rug Pulls and Security. They highlight the need for contract audits.