Let’s say you have been eyeballing a new project for a while now and they finally launched their token. The project seems decent and you have a feeling that this token might go x1000 in price. After you filled your bags, you sit back and relax: The price is starting to go up! After a while you want to take profits. Unfortunately for you (and many other investors) the token can’t be (emergency) withdrawn from the smart contract. After you watch the price plummet you realize you just got honeypotted. Sounds familiar?
The Honeypot #
A honeypot, which is a type of rug pull, is a malicious token smart contract that has been programmed in such a way that only the owner (wallet) of the contract can remove the deposited tokens. Like a real pot of honey, your tokens get stuck and can’t leave. Typically, memecoin and shitcoin investors become victims of this type of scam.
Like many other rug pulls, you are unable to retrieve your funds from the smart contract. So, should you be reading this article with the hope that there’s a way to get your tokens back – Then no, there isn’t. The main issue with honeypots is that they are much harder to detect than other rug pulls. Even experienced crypto traders fall victim to this scam.
Usually, honeypots work as follows:
- The malicious project earns the trust of its potential investors (also known as victims) via social media and Telegram.
- The malicious project launches their token, and the soon-to-be-victims start filling their bags.
- The token price begins to pump – Greed starts taking over, as more victims start buying the token.
- The moment when the victims want to cash out their profits, they realize they can’t – The contract won’t allow anyone but the contract owner to withdraw the tokens.
Introducing RugDoc’s Honeypot Token Checker #
Fortunately, the RugDoc team hasn’t been idle. We have launched our Honeypot Token Checker tool to help investors verify whether the token of their interest is a honepot scam. The tool is straight forward and easy to use.
Step 1. Choose the right network #
The first step is to choose the network your token is launched on. In this example we use the Binance Smart Chain.
Step 2. Fill in the token address #
Next, we need to fill in the token address of the token of interest. In this example, we use Apeswap’s Banana token. After filling in the token address, press the start button. The tool will now start verifying the token smart contract. In our example, the Banana token passed the tool’s honeypot test.
Conclusión #
Once you fall victim to a honeypot, there’s nothing you can do to save your funds. However, our tool can help you to spot potential honeypots before you invest in a project’s token. Make sure to read our other articles on our wiki page as well: Our ‘How To’s: Yield Farming’ and ‘Recursos: DeFi’ categories contain valuable information that will help you prevent to become a victim to a scam project.
