Honeypot Tokens Explained: How They Trap Your Money

A honeypot token is one of the most insidious scams in crypto. Unlike a rug pull where the developer drains liquidity, a honeypot prevents you from selling the token entirely. You can buy it, you can watch the price go up, but when you try to sell — your transaction fails. Your money is trapped.

How Honeypot Tokens Work

Honeypots exploit the programmability of smart contracts. On blockchains like Ethereum, BSC, and Solana, tokens are governed by code. Scammers add hidden functions to this code that block sales by anyone except themselves.

Common Honeypot Techniques

1. Transfer Restrictions

The contract includes a function that blocks transfer or approve calls from addresses that aren’t whitelisted. The developer whitelists their own wallet, so only they can sell.

2. Hidden Fee Manipulation

The contract sets a 99% sell tax on all transactions — except for the developer’s wallet. You technically can sell, but you receive almost nothing. Meanwhile, the developer sells with 0% tax.

3. Balance Manipulation

The contract shows a fake balance in your wallet through the balanceOf function, but when you try to sell, it reads from a different internal mapping that shows zero.

4. Blacklist on Buy

Some contracts automatically add buyers to a blacklist. Once blacklisted, those addresses can never sell. Only the developer’s address is exempt.

5. Max Transaction Limits

The contract sets an absurdly low maxTransactionAmount for selling (like 1 token) while allowing unlimited buys. This effectively prevents meaningful sales.

How to Detect a Honeypot

Check Before You Buy

The easiest way to check if a token is a honeypot is to use Is The Token Dead. Our tool automatically analyzes the token contract and flags honeypot indicators. If the honeypot flag is set to true, do not buy the token.

Simulate a Sell

Before buying, use a DEX aggregator or blockchain simulator to test if a sell transaction would succeed. If the simulation fails or shows an unreasonable slippage requirement, the token is likely a honeypot.

Read the Contract

If you can read Solidity or Rust, examine the token’s smart contract on the block explorer. Look for:

• require statements in the transfer function that reference owner-controlled variables
• Hidden mapping variables that act as blacklists
• Functions like setTaxRate, setMaxSell, or excludeFromFee that the owner can call

Check the Transaction History

Look at the token’s transaction history on the block explorer. If you see many buy transactions but very few sells (or sells only from a single address), it’s almost certainly a honeypot.

Look at Holder Behavior

A token where the number of holders only increases and never decreases is suspicious. Real tokens have holders who buy and sell. A honeypot shows a one-way flow of money in.

Real-World Examples

The Classic BSC Honeypot

BSC (BNB Smart Chain) was plagued by honeypots in 2021-2022. Scammers would create tokens on PancakeSwap, run a brief marketing campaign on Telegram, and watch the money flow in. The tokens would show impressive price charts — always going up — because nobody could sell. The scammer would eventually sell their tokens and move on.

Solana Honeypots

On Solana, honeypots often work differently. They use freeze authority — a feature that allows the token creator to freeze any wallet’s tokens. The creator watches for buys, then freezes the buyer’s tokens so they can never be transferred or sold.

Our tool specifically checks for Solana freeze authority and mint authority as red flags.

What Happens If You Buy a Honeypot

If you’ve already bought a honeypot token, the unfortunate reality is:

1. You cannot sell — The whole point of the scam is to prevent this
2. The tokens are worthless — They have no real market value
3. There is no recourse — Blockchain transactions are irreversible

The best you can do is:

• Write off the loss
• Report the contract address to scam databases
• Help others avoid the same trap by sharing your experience

How to Protect Yourself

1. Always check first — Run the token through Is The Token Dead before buying. We check for honeypot indicators automatically
2. Test with a tiny amount — If you must buy an unverified token, buy the smallest possible amount first and try to sell it immediately
3. Verify the contract — On Ethereum and BSC, check if the contract is verified on the block explorer. Unverified contracts are a red flag
4. Check Solana authorities — For Solana tokens, ensure mint authority and freeze authority have been revoked
5. Don’t chase green candles — A token that only goes up is not a good sign; it likely means nobody can sell

The Connection Between Honeypots and Dead Tokens

Every honeypot eventually becomes a dead token. Once the scammer has extracted enough value, they stop maintaining the illusion. The token sits on the blockchain forever, a monument to the scam.

Visit the Token Graveyard to see confirmed honeypots alongside other dead tokens. You’ll notice that honeypot tokens often have some of the highest death scores because they fail every health metric: no real volume, no real holders, and zero functional liquidity.

The crypto space is full of opportunities, but it’s also full of traps. Taking 10 seconds to check a token can save you from becoming another victim. Use Is The Token Dead and stay safe.