What Is Honeypot In Crypto And Why Freebies Can Be Dangerous

'Free crypto! Token giveaway only today! Get $500 for signing up!' — these are exactly the kinds of messages that are appearing more and more often on social media and suspicious websites. According to the latest 2025 data from Chainalysis analysts, the amount of funds lost by users to crypto scams has increased by 27% compared to the previous year. Nearly half of these cases are linked to so-called honeypots — traps where victims voluntarily hand over their money to scammers hoping for a 'freebie'. While these schemes used to look crude, today they have become highly professional: fake websites and social media accounts look legitimate, copy the design of well-known projects, and even attract famous influencers for promotion. People let their guard down because everything looks real. But behind the promises of easy money typically lies a carefully crafted theft scheme.

What Is A 'Honeypot' In Crypto In Simple Terms

A honeypot in crypto is a deliberately created trap designed to make you invest or perform a transaction that will only benefit the scammers. Simply put, it is a snare for people craving quick profits. Scammers develop a token or a smart contract with 'hooks' in the code that prevent you from selling the token after buying or from withdrawing money from the contract. On the surface, everything looks legitimate: there is a website, a slick 'white paper', active channels on Telegram and X, advertising through bots, and even fake articles in the media. Most often, in the early days, the token really does rise in price, which only fuels the interest. But once you try to withdraw your profits, you realize your funds are permanently locked. This scheme is especially popular in DeFi: according to Messari’s 2025 report, honeypots account for over 8% of all scams in the smart contract ecosystem.

How Traps For The Greedy Work — Schemes And Examples

The classic honeypot scenario begins with the launch of a token on a blockchain, most frequently on the Ethereum or Binance Smart Chain networks, where it is easy and cheap to create smart contracts. The creators hype up the token using paid social media posts, fake reviews, and bots that create the illusion of excitement. The token’s price can really jump several times because the creators themselves buy it up, pushing the price higher. You, as an ordinary user, see the 'growth' and also buy the token. But when you try to sell it, the contract returns an error or processes the transaction in a way that sends the funds to the creator’s address. An example is the Squid Game Token project, which stole over 3 million dollars in 2021, but since then, similar schemes have multiplied many times and evolved to hide behind any trending topic: AI, metaverses, ZK technologies.

How To Check A Project Before Participating

Before getting involved with a project, you need to understand who created it and why they need users. Honest teams always publish information about themselves: LinkedIn profiles, biographies, interviews, photos, and videos. If the creators are anonymous, and it is not justified by the technical specifics of the project, it is a red flag. Check the smart contract for functions that block token sales — this can be done through services like HoneyPot.is or RugDoc. Review the domain’s history: if it was registered just a few weeks ago, that is a warning sign. Look at activity statistics: real projects have discussions on Reddit, X, and specialized forums where people share genuine experiences, not just glowing reviews. Evaluate the project’s partners: serious teams collaborate with exchanges and well-known funds. Finally, do not be lazy to read the smart contract code if you can, or get a specialist to help you.

Where To Learn So You Understand Crypto And Avoid Traps

The best thing you can do for your financial safety is to gain systematic knowledge about crypto and blockchain. Many people lose money for no reason simply because they do not understand the basics: how DeFi protocols work, how smart contracts function, and where scammers most often hide. If you want to master these topics and learn how to analyze projects before putting your money into them, check out the courses at EMCD Academy. There you will find programs for both beginners and experienced users: how to create a wallet, how to protect yourself from phishing, how to read smart contract audits, and how to avoid falling for a honeypot. Education in crypto is not just a way to earn more, it is a way to protect yourself and your assets in a world where the risk is always high.