Buy/Sell Tax
By CoinGecko | Updated on Feb 21, 2022
It is possible to code a smart contract token to have an innate on-chain "tax" whenever someone wants to buy or sell the tokens. The way it works is that a percentage of the tokens being bought or sold is transferred to a preset address - essentially "taxing" the buyer and seller and thus discourage wash trading. However, this code function is can be abused where the tax rate is unreasonable, making it a Honeypot.
Related Terms
Proof of Stake (PoS)
A consensus algorthm that assigns block validation queue based on the coins/token locked in by the validator.
Stablecoin
Cryptocurrency with a price peg to fiat currencies or commodity.
Smart contracts
Self executing contracts on the blockchain without needing human executors or notary.
When Lambo
An expression used by investors to ask when the value of their investment could buy them a Lamborghini
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