A buy/sell tax is a fee coded into some token contracts that takes a percentage of every purchase or sale. The tax is usually sent to a team wallet or used to add liquidity. It's common on Ethereum-compatible chains.
Why it matters
- Hidden cost. A 5% buy tax plus a 5% sell tax means a trade has to rise more than 10% just to break even.
- Changeable taxes. If the contract owner can raise the sell tax, they can turn the token into a honeypot at any moment. At 100%, selling becomes pointless.
What to check
- The current buy and sell tax, which a honeypot simulator or token checker shows.
- Whether the owner can change the tax. Look for owner-only functions in the verified contract.
- Whether ownership has been renounced.
Standard launchpad contracts usually have no taxes. Custom-deployed tokens need checking every time.
Educational content only. Not financial advice.