Beware of Pixiu Coin Scams

What is Pixiu coin?

Pixiu Coin, also known as a Honeypot Token, refers to a type of token in the blockchain world that allows buying but not selling.

Scammers design schemes to lure investors into purchasing the token, causing the price to rise rapidly and triggering herd buying behavior. However, when investors try to sell, they may be charged extremely high transaction fees or find that the token cannot be sold at all, leaving their funds trapped.

Common tricks with Pixiu coin

Some Pixiu (honeypot) coins are designed in a way that only the project team’s wallet addresses can sell. Others may allow selling only once or only in very small amounts.

Project teams use various technical methods to control or restrict selling, such as:

• Using a whitelist to limit which addresses can sell

• Preventing sales to DEX addresses

• Setting extremely high selling fees

• Limiting the total amount that can be sold

• Adding on/off control switches in the contract

Typical Lifecycle of a Pixiu coin

Pixiu coins usually follow these four steps:

1. Token creation
   The project team creates a Pixiu coin. Some projects even use media promotion, while copycat projects may imitate the name and logo of well-known token and deploy contracts with the same name. If users do not verify the token's contract address carefully, they can be scammed easily.

2. Adding liquidity
   The project team injects an initial amount of funds, or repeatedly adds small amounts, to create early market liquidity and make the token appear to be tradable.

3. Price manipulation to attract investors
   Since investors can buy but cannot sell (or can only sell with very high fees), the price rises continuously. The project team then uses community hype and sharp price increases to promote the illusion of high returns and attract more buyers.

4. Exit scam (Rug Pull)
   Once there are enough funds accumulated or the price of token reaches a certain level, the project team sells in large quantities to cash out or disappears with the funds. Investors are unable to sell and suffer significant losses.

Warning signs of Pixiu coin scams

Before placing a trade, watch out for the following three red flags:

• Abnormal Contract Permissions
  When you are checking the contract on Etherscan, if you can find functions such as pauseTransaction or blacklist, it means the project team can freeze or block transactions at any time.

• Highly Concentrated Token Distribution
  If the top 10 wallet addresses hold more than 80% of the total supply of the token, the token is likely controlled by the project team.

• Exaggerated Marketing Claims
  Promises such as guaranteed returns, risk-free profits, or official partnerships are common scam tactics and should raise serious concerns.

How to prevent Pixiu coin scams?

• Understand the detailed information and background of the project, especially for some copycat projects that are highly concealed. When you are searching for token, you should search by using contract address instead of token name to avoid falling into copycat traps.

• Don't blindly trust promotions from social media or community invitees. Be cautious of projects promising high returns as extremely high returns usually mean greater risk.

• Check whether the code has been audited and authenticated on block explorers like Etherscan, and refer to community reviews.

• Check the relevant token's risk details using your Web3 wallet: https://web3.okx.com/zh-hans

How to assess the risk of a token?

1. Go to OKX Wallet website.

2. Enter the token's contract address and select the target token from the search results.

3. Review the results including the overview and risk assessment:

• If it shows high risk or suspected Pixiu/Honeypot token, proceed with extreme caution.

• Even if it shows low risk or unknown, be alert to whether the project team retains permissions to change selling rules.

Note: you can also consider additional factors such as on-chain trading volume, liquidity, number of holders, or monitor the token over time to make a rational judgment before purchasing.

What to do if I accidentally bought a Pixiu coin?

If you have accidentally purchased a Pixiu coin, please take the following steps immediately:

1. Preserve Evidence

   • Take screenshots of your transaction records and any promotional messages from the project team (e.g., Telegram group messages).

2. Contact Customer Support

   • Our security team can help track whether the funds have entered OKX.

3. Report to Authorities

   • File a report with your local police or financial regulatory authorities.

4. Stay Updated

   • OKX updates the list of high-risk tokens regularly. Kindly check the latest alerts to stay informed.