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
ROI
Short for “Return on Investment”, the ratio between the net profit and cost of investing.
Degen
Cryptotrading without Due Diligence and research - basically gambling
Open/Close
The price at which a cryptocurrency opens at a time period, for example at the start of the day; the price at which a cryptocurrency closes at a time period, for example at the end of the day.
51% Attack
An attack on blockchain by a group of miners controlling more than 50% of network hash rate
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