Honeypot

Probably the most common rug method.

How It Works:

• In a honeypot, developers create a token with a smart contract that allows buying but blocks selling. Unsuspecting investors buy the token, only to find out they cannot sell it.

• The developers then dump their holdings, taking the liquidity and leaving investors stranded.

• Often, you'll find contracts where owners are generating high volume on purpose to imitate a hyped launch. They are able to "whitelist" these volume-generating wallets to sell so that it seems to outsiders that the contract is not configured for honeypotting new buyers.

How to Spot It:

• Test Transactions: Start with small transactions to test buying and selling the token. There are contract simulators integrated into many chart services like Dextools or Dexscreener, which help you with useful insights.

• Smart Contract Analysis: Check for restrictive code that limits sell functions or imposes unusually high sell fees.