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
Off-chain
It refers to transactions occuring outside the blockchain and executed instantly.
YTD
Acronym for Year-to-date
EIP (Ethereum Improvement Proposal)
Refers to improvement proposals for Ethereum, used to introduce features or any updates on the Ethereum network.
Sell wall
Anomalously large sell order(s) at a single price point that reflects as a "wall" in the order book.
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