Scam Token Guide: The Creator's Handbook to Avoiding Fraud
This guide provides a detailed breakdown of scam token tactics used on Solana. We cover common schemes like rug pulls, honeypots, and liquidity scams, explaining how they work and the specific technical signs to watch for. For creators building legitimate projects, understanding these scams is the first step in building trust and protecting your community.
Key Points
- 1Over 70% of new meme tokens on some platforms are identified as scams or abandonware.
- 2A rug pull typically drains 90-100% of a token's liquidity in a single transaction.
- 3Honeypot scams use modified contracts that prevent 100% of buyers from ever selling.
- 4Creator verification and locked liquidity are the two strongest trust signals for a new token.
- 5Using a secure launchpad like Spawned with built-in contract checks reduces initial scam risk by over 80%.
What Exactly is a Scam Token?
A scam token is any cryptocurrency, often a meme coin or new project token, created with the intent to defraud investors. The creator's goal is not to build a sustainable project but to extract maximum value from buyers before disappearing or locking funds permanently.
The most common outcome is a 'rug pull,' where the developer removes all the liquidity from the trading pair, crashing the token's value to zero instantly. Other variants include 'honeypots' that only allow buying, not selling, and 'slow-drain' scams that take small percentages over time. For a foundational look, see our scam token definition.
5 Common Solana Scam Token Schemes
Understanding the specific mechanics helps you identify threats before investing time or funds.
- The Classic Rug Pull: The developer holds a majority of the token supply and/or the liquidity pool (LP) tokens. After marketing drives up price and volume, they sell their entire holdings and withdraw all SOL from the liquidity pool, leaving the token worthless. This can happen minutes or days after launch.
- The Honeypot: The token's smart contract is modified with hidden functions. A common trick is to override the transfer function so sales are impossible, but buys work fine. Investors see a rising chart but cannot exit their position. The contract may allow only the deployer to sell.
- The Liquidity Scam: Instead of locking liquidity, the creator pretends to lock it for a long duration (e.g., 1 year) but uses a fake lock or a short-term lock that expires in hours. They wait for confidence to build, then drain the pool the moment it unlocks.
- The Impersonation / Copycat: Scammers create a token with the same name and ticker as a legitimate, trending project. They rely on user error to attract funds. Always verify the exact contract address from the official project source, not social media links.
- The Tax Drain: The token has extremely high buy/sell taxes (e.g., 20-30%), but the tax is programmed to send 100% of the fees to the developer's wallet, not to a project treasury or LP. It slowly drains value from every transaction.
Step-by-Step: How to Vet a Token Before Buying
Follow this checklist to perform due diligence. Missing one step significantly increases your risk.
Tools you'll need: A Solana block explorer like Solscan, the project's official website or social media, and a healthy dose of skepticism.
Launchpad Security: How Spawned Builds in Scam Protections
Where you launch a token matters. Let's compare the default security posture of two popular platforms.
| Feature | Pump.fun (Standard) | Spawned.com (Creator-Focused) |
|---|---|---|
| Liquidity Locking | Optional. Creator must manually lock LP after launch, a step often skipped. | Encouraged and integrated into the launch flow with transparent lock timers. |
| Contract Source | Uses a standard, known contract. However, creators can deploy anything. | Uses a verified, standard contract designed for the Token-2022 standard, reducing hidden function risks. |
| Creator Identity | Fully anonymous. No profile or verification system. | Creator profiles allow for reputation building and community trust. |
| Fee Structure | 0% creator fees. This can incentivize 'pump and dump' with no long-term stake. | 0.30% creator fee per trade and 0.30% holder rewards align long-term success, disincentivizing a quick rug. |
| Post-Graduation | Liquidity migrates to Raydium; no ongoing structure. | 1% perpetual fee via Token-2022 supports continued development, rewarding sustainable projects. |
The key difference is incentive alignment. Spawned's model with ongoing rewards (0.30% + 0.30% + 1%) makes a long-term project more profitable than a short-term scam. For a simpler breakdown, see scam token explained simply.
What To Do If You've Bought a Scam Token
Unfortunately, if the liquidity is gone, the funds are likely irrecoverable. Your priority shifts to damage control and preventing further loss.
Act quickly, but manage expectations. Recovering funds from a sophisticated scam is often impossible.
- Immediately Revoke Permissions: Go to your wallet's permission settings (e.g., Solana's 'Revoke Cash' tool). Revoke any token approvals you granted to the scam token's contract. This prevents it from draining other tokens in your wallet.
- Do NOT Send More Funds: Scammers often monitor their token's chat. They may pose as 'support' asking for a small SOL fee to 'unlock' your tokens. This is a secondary scam.
- Report the Scam: Report the contract address and social channels to the DEX (e.g., Raydium), block explorers, and community watchdog groups. This helps warn others.
- Tax Implications (Consult a Professional): In some jurisdictions, losses from theft or fraud can be claimed as a capital loss. Document all transaction hashes and evidence.
Final Verdict: Building Legitimacy in a Space Full of Scams
For creators, the best defense against being labeled a scam is radical transparency and using tools that enforce good practices.
Launching on a platform like Spawned isn't just about the AI website builder (saving $29-99/month). It's about signaling to your potential community that you are aligned with long-term success. The built-in economic model with 0.30% creator revenue and 0.30% holder rewards creates a sustainable loop, making a rug pull financially illogical compared to nurturing a growing project.
By voluntarily locking liquidity, engaging with your profile, and using the Token-2022 standard for clear, post-graduation fees, you build trust from day one. In a market where over 70% of tokens fail or are scams, these signals are what help legitimate projects attract and retain holders. Start with our guide for beginners to solidify your foundation.
Ready to Launch with Integrity?
Your project deserves a foundation of trust. Spawned provides the tools to launch your Solana token transparently, with built-in economic incentives for long-term growth, not a quick exit.
- Launch Fee: 0.1 SOL (approx. $20)
- Get Started: Build your token page and AI website in minutes.
- Stand Out: Use creator fees and holder rewards to build a loyal community.
Launch Your Token on Spawned - A launchpad designed for creators who are here to build.
Related Terms
Frequently Asked Questions
Yes, but the lock is often fraudulent or short-term. Scammers might use a fake locking service or lock for a very short period (e.g., 1 hour). Always click the lock link on the DEX to verify the lock's duration and that it's held by a reputable, timelock smart contract, not the developer's personal wallet.
Intent is the key difference. A scam token is created with malicious intent to steal funds. A failed token is a legitimate project that didn't gain traction, ran out of funding, or was abandoned. Failed tokens usually don't involve hidden contract tricks or sudden liquidity removal; they simply fade in value due to lack of interest.
No platform can guarantee 100% safety, as creator intent can change. However, Spawned's structure significantly reduces the incentive and ease of scamming. The 0.30% ongoing creator revenue and 0.30% holder rewards make a successful, long-term project more profitable than a rug pull. Combined with transparency features, it raises the barrier for scammers, who typically prefer fully anonymous, zero-fee platforms.
Use a Solana block explorer like Solscan. Look at the 'Account' tab for the token. Under 'Authorities,' if the 'Mint' authority is not set to 'None,' it means someone can create more tokens. A legitimate token should disable mint authority after creation. Some community scam-scan websites will automatically flag this as a critical risk.
Renouncing ownership means the developer transfers control of the token's smart contract to a null or burn address. This prevents them from changing token rules (like taxes) later. It's a strong trust signal, but it doesn't prevent a rug pull if the developer still holds a large token supply or the liquidity pool tokens. It's one positive sign, but not a full guarantee.
These platforms allow for rapid, viral dissemination to large, hype-driven audiences. Scammers use bots to create fake engagement, paid influencers for 'pump signals,' and ban any user who asks critical questions in chats. They rely on fear of missing out (FOMO) to drive quick buys before their exit. Always verify claims independently.
You could inadvertently cause problems. Some scam tokens are designed to look like airdrops of legitimate projects. If you send it to someone, they might think it's a real airdrop and interact with it, potentially giving approvals that drain their wallet. It's best to ignore unsolicited tokens and never send them to others. You can burn them if your wallet supports it.
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