RateKite

What is a honeypot token?

A honeypot token is one that anyone can buy but that ordinary holders cannot sell, or can only sell at a loss so large that it amounts to the same thing. Only the creator's wallets can exit. The chart looks healthy because there are almost only buys, which is exactly what attracts more buyers.

Updated

How honeypots work on Solana

Solana tokens do not carry custom contract code the way many EVM tokens do, so the usual mechanisms are the token's own settings:

  • Freeze authority. The creator freezes buyers' token accounts, which can then no longer transfer or sell. See freeze authority.
  • Token-2022 extensions. Tokens on the newer token program can use a transfer hook that rejects some transfers, a very high transfer fee, or a default state that leaves new accounts frozen.
  • A permanent delegate. Another Token-2022 extension that lets one key move or burn tokens from any account.

On EVM chains, the same effect usually comes from contract code with blacklists or sell taxes.

Warning signs in trading data

  • Almost only buys. In a normal market, some people take profits. When more than 92% of at least 30 transactions are buys, RateKite adds 8 risk points: it can mean bots, or that selling is restricted.
  • Steady price with no dips. A chart that only goes up on a new token often means nobody else can sell.
  • Active freeze authority. Adds 5 risk points on its own.

Each of these can have an innocent explanation. Together, on a token that is hours old, they are a strong reason to look closer.

How to check before trading

  • Check that the freeze authority is revoked, on the token page or a block explorer.
  • On a block explorer, check which token program the token uses and, for Token-2022, which extensions are enabled.
  • Look at recent transactions: are there sells from ordinary wallets, not just from the largest holders?
  • Many Solana wallets simulate a transaction before you sign it; a warning or a failed simulation on a sale is a red flag.

RateKite does not test whether a token can be sold or read Token-2022 extensions; it shows the trading pattern and authorities. The full checklist is in how to check a new token.

Frequently asked questions

Can a token with a revoked freeze authority still be a honeypot?
Yes, if it uses Token-2022 extensions such as a transfer hook, a very high transfer fee or a permanent delegate. Revoking the freeze authority removes one mechanism only.
Why is a high share of buys a warning sign?
In open markets some holders always sell. When almost every transaction is a buy, it can mean that selling is blocked or that bots are generating the activity.
Does RateKite detect honeypots?
Not directly. It flags signals associated with them, such as an active freeze authority and one-sided buying, but it does not simulate sales or read Token-2022 extensions.