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
Address Delegation
Delegation of a wallet's stake to a Super Staker
Smart contracts
Self executing contracts on the blockchain without needing human executors or notary.
InterPlanetary File System (IPFS)
The InterPlanetary File System (IPFS) is a peer-to-peer network and distributed file system protocol for storing and transferring data.
Peer to Peer
A communication protocol that does not require a central hub
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