#wodlanswer #HoneypotScams

What Is a Honeypot?

In Web3, a honeypot is a malicious smart contract that looks like a normal token but is intentionally coded to trap your funds. A token like this may be advertised as the next moonshot, but behind the scenes, its underlying code is rigged, waiting for unfortunate investors to find out that they can’t sell the asset at all.

Here's how this scam usually plays out:



Creation and Promotion: A new token is launched on-chain and is marketed through fake ads and hype campaigns on platforms like X, Telegram, and WhatsApp. 

Simulation of Activity: Artificially injected liquidity and fake trades, all engineered by the scammers behind the token, make the asset look popular. This hype causes more buy-ins, price increases, and if the cycle catches on, the fear of missing out (FOMO) drives even more users to the malicious project, leading to an uptick in activity, part of which may be organic.

Ditch and Run: Once enough users are drawn in, the trap is sprung. Attempts to sell the token are met with failed transactions or blocked permissions – users simply can’t cash out. Behind the scenes, scammers have either quietly programmed the contract to restrict selling or drained the liquidity pool. With the illusion of a thriving token still intact, they siphon off the funds and vanish, leaving holders stuck with assets they can’t move or redeem.

Rinse and Repeat: The cycle starts again with a new honeypot token trapping more innocent victims