Why Some Tokens Can Be Bought but Not Sold

Decentralized exchanges sometimes list tokens that look completely ordinary: they have a price, a trading pool, and a transaction history.

But the rules of the smart contract—the program on the blockchain that controls the token—may be designed so that buying is allowed for everyone while selling is blocked.

Such assets are called honeypot tokens, or trap tokens.

As long as new users continue buying the coin, its price may rise. The problem is discovered only when trying to exit the position.

How a honeypot works
The restriction is usually built directly into the smart contract. It may allow tokens to be received in a wallet while prohibiting their transfer back to the trading pool.

In another version, selling is technically possible, but the contract imposes a fee that takes almost the entire amount. For example, a 99% sell tax means that out of a hypothetical $1000, the user can actually recover only about $10.

What it looks like to the buyer
Suppose a user buys an unknown token for 500 USDT. A few hours later, the wallet interface shows that the position is now worth $800. On paper, the profit is $300. But when the user tries to sell the token, the transaction is rejected or the contract withholds almost the entire amount.

As a result, the $800 remains only an estimated value based on the current price. In essence, it is just an image. The user cannot actually obtain this money.

That is why the price increase of a honeypot token can look especially convincing. New purchases continue, while some holders are simply unable to sell.
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