What is a Honeypot Scam?
As shown in the picture above, the attacker will set a trap in advance, put money in it, and then wait for you to take the bait and then close the net. Once you take the bait, you cannot get out.
You can think of it as, I minted a token, and then kept raising the price, and promoted it everywhere on social platforms (such as X, Weibo), and then you saw it, and bought my token on the chain (primary market), and then you will find that you can’t exchange it, even if the price of the token has increased by dozens or thousands of times, you can’t exchange it, and then I just need to wait for enough leeks to withdraw their funds, and you will lose everything. Usually, we call this kind of token "Pixiu Coin".
Simply put, the "honeypot scam" is divided into 4 steps:
Creating a fake entity: Scammers will create a fake cryptocurrency project. These fake projects often look very real and even have their own fancy websites and social media accounts. Scammers promote them widely through these channels to attract more investor attention and investment.
Promotional Projects: Scammers use various channels such as social media, forums, search engines, etc. to promote their products. They may use paid advertising or SEO techniques to increase the visibility of the fake entity, making it easier to attract scammers.
Investment fraud: Investors unknowingly put their money into these seemingly legitimate projects. Scammers use various means to make the projects look very attractive, such as constantly pumping up the price.
Restricted withdrawals: When investors try to withdraw or sell their investments, they find themselves unable to do so and their funds are controlled by the scammers. The core of the honeypot scam is to restrict investors’ liquidity, making it impossible for them to withdraw in time, and thus forcing them to lose their funds.
Why can't I sell Pixiu tokens?
Restricted sale functionality: Many Pixiu coins’ smart contracts contain code that restricts sales. This means that investors can easily buy tokens, but when trying to sell, the contract blocks the transaction. This restriction is often hidden in the complex code of the contract.
Blacklist mechanism: Some token contracts will automatically blacklist the addresses of all buyers, and only the contract creator or a specific address can perform sales operations. This mechanism ensures that only scammers can profit from it, while ordinary investors are trapped.
High transfer fees: Some scam tokens will set high transfer fees, making it very expensive to sell the token, thus discouraging investors from trading. These fees may be hidden in the details of the contract.
How to avoid buying Pixiu coins?
Verify project background: Investigate the project team, white papers, and community feedback in detail. Legitimate projects usually have transparent information and credible team backgrounds.
Test small transactions: Before making a large investment, you can try to make small transactions to test whether the buying and selling functions of the tokens are normal.
If you don’t have programming skills, you can use Pixiu identification tools, such as Token Sniffer and Ave Check. If the score is low, it is most likely a Pixiu.
Now, after importing tokens, most wallets can check the "Contract Detection" to see whether the contract ownership has been given up.
