Why You Need to Check Before You Buy
The barrier to launching a new token is effectively zero. Anyone can deploy a contract in minutes for a few dollars, which means thousands of new tokens appear every day — and the overwhelming majority are designed to take your money.
According to on-chain security databases, over 300,000 honeypot tokens have been flagged, and rug pulls remain the most common form of crypto fraud. The average victim loses hundreds to thousands of dollars on a single bad swap — money that is almost never recovered because blockchain transactions are irreversible.
The cost of not checking:
A single 10-second check can save you from a total loss. Skipping it means trusting an anonymous deployer with your capital — and in the current market, that is a bet you will lose more often than not.
The 5-Step Pre-Buy Checklist
Run through these five steps in order before every purchase. The full checklist takes under a minute when you use automated tools, and it catches the vast majority of scam tokens.
- 1Run a honeypot check
A honeypot lets you buy but blocks you from selling. Paste the contract address into Guava's free honeypot detector, which simulates a real buy and sell transaction plus 30+ security checks in under 2 seconds. If the sell simulation fails or the sell tax is above 10%, walk away.
Open the honeypot detector - 2Check liquidity and LP locks
Liquidity is what lets you sell your tokens. If the pool is unlocked or only locked for a few hours, the deployer can drain it at any time. Use the rug pull checker to confirm the pool size is at least $50,000 and the lock lasts 6 months or more.
Open the rug pull checker - 3Analyze holder concentration
Look at the top 10 holders. If they own more than 50% of the supply, a single coordinated dump can crash the price to zero. Check the dev wallet specifically — a dev wallet holding more than 10% of supply is a major red flag. Ideally, no single wallet (excluding exchanges and pools) holds more than 5%.
- 4Verify the contract source
The contract source must be verified on a block explorer so you can confirm what the code actually does. Check three things: the source is verified, there is no proxy pattern hiding the true owner, and ownership has been renounced. Unverified contracts are an automatic no.
- 5Check the deployer wallet
The wallet that deployed the token tells you a lot. Run it through the wallet risk checker to see every token that wallet has created and how many were flagged as scams. A deployer with a history of rug pulls or honeypots is a hard pass, no matter how good the current token looks.
Open the wallet risk checker
Red Flags That Mean Walk Away
If a token shows any of these signals, do not buy it. A single red flag is often enough to justify walking away — multiple red flags are a guarantee.
Sell tax above 10%
High sell taxes drain value on every exit and are a common honeypot mechanism. Anything above 25% is almost always a scam.
Liquidity not locked
If the liquidity pool is unlocked or only locked for a few hours, the deployer can pull the pool and leave buyers with worthless tokens.
Top 10 holders own over 50%
When a handful of wallets control the majority of supply, a coordinated dump can crash the price instantly.
Unverified contract source
If the source code is not verified on a block explorer, you have no way to know what the contract actually does.
Hidden or unrenounced ownership
An owner who has not renounced ownership can mint new tokens, change taxes, or blacklist wallets at any time.
Deployer created many tokens
A wallet that has deployed dozens or hundreds of tokens is often a serial scammer rotating fresh contracts.
No liquidity or tiny pool
A token with under $10,000 of liquidity is trivially easy to manipulate and almost impossible to exit safely.
Anonymous team with no track record
If no one is willing to put their name behind the project, there is no one to hold accountable when it rugs.
Pressure to buy immediately
Scammers manufacture FOMO with countdowns, fake exchange listings, and promises of guaranteed returns.
Blacklist or pause functions present
Contract functions that let the owner freeze transfers or block wallets are a direct threat to your ability to sell.
Green Flags That Mean Safer
No token is risk-free, but these signals indicate a project is built for legitimate trading rather than a quick exit. The more green flags a token has, the safer it is to consider.
Liquidity locked for 6+ months
A long lock on the liquidity pool means the team cannot pull the rug, giving holders time to exit safely.
Ownership renounced
Renounced ownership means no one can mint more tokens, change taxes, or add blacklist functions after launch.
Contract source verified
A verified, audited contract lets anyone read the code and confirm there are no hidden trap functions.
Distributed holder base
When no single wallet holds more than 5–10% of supply and the top 10 hold under 30%, the token is far harder to manipulate.
Low buy and sell taxes
Taxes under 5% on both sides suggest the contract is designed for normal trading, not for trapping sellers.
Transparent, active team
A public team with a history of delivered products and active community engagement is far less likely to rug.
Tools to Use
Guava provides free tools that run the entire 5-step checklist automatically across 31 chains. Use them before every purchase.
Token Safety Checker
Run 30+ security checks on any token in under 2 seconds — honeypot simulation, taxes, liquidity, holders, and ownership.
Open toolFree Honeypot Detector
Simulate a real buy and sell to confirm whether a token will let you exit or trap your funds.
Open toolRug Pull Checker
Verify liquidity locks, pool size, and LP token burns to catch rug pulls before they happen.
Open toolWallet Risk Checker
Investigate the deployer and top holders — see if a wallet has deployed scam tokens before.
Open toolFrequently Asked Questions
How do I check a token before buying?
Run the contract address through a token safety checker that performs a honeypot simulation, checks liquidity locks, analyzes holder concentration, verifies the contract source, and flags the deployer wallet. Guava's free token safety checker runs all 30+ of these checks in under 2 seconds across 31 chains.
What is a honeypot token?
A honeypot is a token whose smart contract lets you buy but blocks or heavily taxes sells. The contract uses hidden functions, blacklists, or 99%+ sell taxes to trap your funds. Always run a honeypot check before buying any new token.
How much liquidity should a token have?
A token should have at least $50,000–$100,000 of locked liquidity to be considered reasonably safe. Anything below $10,000 is trivially easy to manipulate. The liquidity should also be locked for at least 6 months, ideally a year or more.
What percentage should the top 10 holders own?
Ideally the top 10 holders combined should own less than 30% of the circulating supply. If a single wallet holds more than 10%, or the top 10 hold over 50%, the token is highly concentrated and vulnerable to a coordinated dump.
Why does contract verification matter?
A verified contract means the source code is published on a block explorer and matches the deployed bytecode. Without verification, you cannot know whether the contract contains blacklist functions, hidden mints, or sell-blocking traps. Never buy a token with an unverified contract.
What does it mean to renounce ownership?
Renouncing ownership means the contract owner gives up all control over the token. The owner can no longer mint new tokens, change taxes, blacklist wallets, or pause transfers. Renounced ownership is one of the strongest green flags a token can show.
How do I check the deployer wallet?
Paste the deployer's wallet address into a wallet risk checker. It will show every token that wallet has created, how many were flagged as scams, and whether the wallet is linked to known rug pulls. A deployer with a history of scam tokens is a hard no.
Is it safe to buy a token with no liquidity lock?
No. Without a liquidity lock, the deployer can remove the liquidity pool at any moment, leaving holders with tokens that cannot be sold. Always confirm the liquidity is locked for a meaningful period before buying.
Check Every Token Before You Buy
Guava's free token safety checker runs 30+ security checks on any token across 31 chains in under 2 seconds. Don't swap without it.