What Is a Honeypot Scam in Crypto?
A honeypot scam in the cryptocurrency world is a deceptive tactic where investors are tricked into buying a token they can’t sell. Everything may appear legitimate — active charts, verified smart contracts, liquidity, and transaction history — but the smart contract is secretly designed to allow only one wallet (controlled by the scammer) to sell the token.
It’s a growing threat in Ethereum and BNB Smart Chain ecosystems, where the flexibility of the Solidity programming language enables scammers to embed hidden rules like blocking sales, setting a 100% exit tax, or blacklisting wallet addresses after a purchase.
How the Honeypot Scam Works
These scams typically unfold in three steps:
- Deployment of a fake token: The scammer launches a new token with what seems like healthy liquidity and trading activity.
- Investor baiting: Unsuspecting users buy in, often influenced by viral marketing or sudden price surges.
- Lock and loot: Once enough buyers are trapped, the scammer either drains liquidity or sells their holdings — profiting while others are stuck with worthless assets.
A key detail: when investors try to sell, the transaction silently fails without an error message, making detection even harder.
Variants of the Honeypot Trap
While traditional honeypots prevent sales entirely, new versions are getting more creative — and dangerous. Here are some variations:
- Super-high exit fees: Some contracts allow sales but impose a 90–100% tax, effectively nullifying the transaction.
- Fake liquidity tokens: Scammers remove liquidity as soon as enough people buy in.
- Malicious wallets: Some promote fake cold wallets with publicly known private keys. Once funds are sent, they’re instantly drained.
Worryingly, honeypot-as-a-service is becoming a thing. Templates and no-code tools are being sold on Telegram and dark web forums, allowing even non-technical scammers to launch these traps with ease.
Honeypot vs Rug Pull: What’s the Difference?
While both are forms of crypto fraud, honeypots and rug pulls operate differently:
- In a honeypot, the smart contract is malicious from the start. Victims can’t sell at all.
- In a rug pull, everything seems fine until developers suddenly pull liquidity, tanking the token’s value. You can still sell — but it’s worth nothing.
How to Spot a Honeypot Before It’s Too Late
To protect your funds, follow these key tips:
- Try buying a small amount and immediately attempt to sell.
- Use scanning tools like Honeypot.is, Token Sniffer, or DEXTools.
- Look for real sell transactions from other wallets.
- Be cautious of projects where sell tax isn’t disclosed or is suspiciously high.
- Don’t rely solely on a “verified contract” status — it means the code is public, not that it’s safe.
- Avoid sudden “viral” tokens that appear out of nowhere.
Conclusion: Trust Is the New Battleground
In today’s crypto market, fraud goes beyond just malicious code — it’s about exploiting trust and human error. As honeypot scams become more sophisticated, staying alert and questioning hype-driven tokens is your best defense. Vigilance is the ultimate security tool in a decentralized world.
