In the previous edition of our Web3 Security Guide, we explored common fake mining pool scams. This time, we will focus on honeypot scams. A honeypot is a deceptive scam that lures users with promises of profits but prevents them from withdrawing their funds once invested.
Why Users Fall for Honeypot Scams
Let's examine some of the common reasons users get caught in honeypot scams. 1. Fake Projects: Some fraudulent projects mimic well-known tokens by copying their names and logos. Users who fail to verify the token’s contract address may unwittingly invest in a honeypot scam and find themselves unable to sell the tokens. 2. “FOMO” Mentality: Some users are aware that a project is unreliable but convince themselves they can 'get in and out quickly'. However, when they try to sell, they either find the tokens are impossible to sell or can only sell a minuscule amount. 3. Scammer-Induced Investments: Scammers persuade users to invest. One victim described how they were convinced to invest in a new token, only to find out it was a honeypot.
Common Tactics of Scammers
Understanding why users fall into honeypot scams is the first step. Let’s look at how scammers execute these schemes. They typically begin by deploying a smart contract with hidden traps, followed by aggressive marketing and token-pumping to lure in users. - Adding Buyers to a Blacklist: Once a user buys honeypot tokens, the scammer adds their address to a blacklist, preventing them from selling. - Modifying Token Balances: Scammers manipulate token balances via the smart contract, reducing the number of tokens users hold without reflecting these changes on blockchain explorers. - Setting High Sale Thresholds: Some honeypot scams allow token sales but set an unattainable minimum sale threshold.
Tips to Prevent Scams
To avoid honeypot scams, consider the following precautions: 1. Educate yourself about the cryptocurrency project and evaluate its team. Be cautious of tokens promising unusually high returns. 2. Use tools to check the risk profile of wallet addresses and assess whether a token might be a honeypot scam. 3. Always verify the token's contract address to avoid counterfeit projects. 4. Check whether the token's contract has been audited and verified through platforms, and read community reviews before investing.
In this guide, we have examined why users fall into honeypot scams and the typical methods used by scammers. To avoid falling victim, it is important to educate yourself, verify projects, and use appropriate tools.
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