> For the complete documentation index, see [llms.txt](https://docs.novamp.io/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.novamp.io/legal-and-safety/token-trading-risks.md).

# Token & Trading Risks

The specific risks of trading newly launched tokens — scams, impersonation, liquidity and rug risk, taxes, approvals, wrong-network loss — and how to check a token before you trade.

New tokens are the highest-risk corner of crypto. This page focuses on the practical risks of **trading** tokens on Novamp and how to protect yourself before you click buy. It complements the broader [Risk Disclosure](/legal-and-safety/risk-disclosure.md).

{% hint style="danger" %}
🚫 Assume every new token can go to **zero**. Never trade with funds you can't afford to lose entirely. Nothing here is financial or investment advice.
{% endhint %}

## Overview

| Risk                                | What it looks like                                                   |
| ----------------------------------- | -------------------------------------------------------------------- |
| **High volatility of new launches** | Double-digit % moves in seconds; snipers and dumps.                  |
| **Scams & impersonation**           | Fake tokens, sites, accounts, and "support" DMs.                     |
| **Copycat identities**              | Look-alike name/ticker riding a real project's momentum.             |
| **Liquidity & rug risk**            | Thin pools, high price impact, pulled liquidity (non-Novamp tokens). |
| **Token taxes**                     | Buy/sell taxes (0–10%) reduce what you receive.                      |
| **Token approvals**                 | Approving a malicious contract can drain your wallet.                |
| **Wrong-network loss**              | Assets sent on the wrong chain can be lost.                          |
| **Irreversible transactions**       | No undo once confirmed.                                              |

## Volatility of new launches

Freshly launched tokens are extraordinarily volatile. Bots may snipe the opening, early buyers may dump, and price can collapse as fast as it spiked. Novamp's **auto-expiring anti-snipe caps** blunt some of this at launch, but they expire and provide **no guarantee**. Size positions accordingly and expect sharp moves.

## Scams & impersonation

Common patterns to watch for:

* **Fake tokens** — a real-looking token that isn't the one you think, or that traces to an unofficial contract.
* **Fake sites / accounts** — phishing pages and impersonator socials. Only use [official links](/resources/community-and-links.md).
* **"Support" / "airdrop" DMs** — Novamp never DMs first or asks for your seed phrase. See [Support](/resources/support.md).
* **Malicious approvals** — a token page or site that asks you to approve an unexpected contract.

## Copycat identities

Scammers reuse a token's **name + ticker** to siphon attention and liquidity ("vamping"). AntiVamp reduces this by locking normalized identities, but:

{% hint style="warning" %}
⚠️ A **Protected-by-AntiVamp** badge means an identity is checked/protected — **not** that the token is safe, legitimate, or a good investment. Always verify the contract, not just the name. See [What Is AntiVamp?](/identity-protection/what-is-antivamp.md).
{% endhint %}

## Liquidity & rug risk

* **Thin liquidity** → large **price impact**: your own trade moves the price against you, and exiting can be costly or impossible. See [Slippage & Price Impact](/traders/slippage-and-price-impact.md).
* **Rug pulls** → on tokens outside Novamp's burn-or-lock model, a creator can withdraw liquidity and collapse the price. On Novamp launches, liquidity is **burned or locked** at launch (see [Security Model](/protocol/security-model.md)) — but this protects only Novamp's own launches, not arbitrary tokens or venues.

## Token taxes

Tax tokens carry a creator **buy/sell tax of 0–10%**, always shown on the token page. This is **separate** from the flat 1% Novamp swap fee. Taxes are **lowerable-only** (never raised), but they still reduce what you receive on each trade. Factor them into your entry and exit. See [Token Taxes](/creators/taxes.md) and the [Fee Model](/protocol/fee-model.md).

## Token approvals

To trade a token, you may need to **approve** a router to spend it. A malicious contract or spoofed approval can drain your wallet. Best practices:

* Approve only official routers/contracts (cross-check [Contract Addresses](/protocol/contracts-and-addresses.md)).
* Prefer minimal / exact-amount approvals where your wallet supports it.
* Review and revoke stale approvals periodically.

## Wrong-network & irreversible transactions

Sending assets on the **wrong network**, to a wrong address, or with wrong parameters can cause **permanent loss** — transactions are **irreversible** once confirmed. Always confirm the chain (`🟢 Robinhood Chain` / `🔵 Base` / `🟡 BNB Chain` / `⚪ Ethereum` / `🟪 Solana`), the recipient, and the amount before signing. See [Switch Networks](/getting-started/switch-networks.md).

## How to check a token before you trade

A quick checklist before committing funds:

1. **Verify the contract** — open the token on its explorer; confirm it's verified (or a "similar match" to the Novamp template) and traces to the official `NovampLaunchFactory`. See [Contract Verification](/protocol/contract-verification.md).
2. **Check supply & controls** — fixed supply, **no mint**, **no owner**.
3. **Check liquidity** — is it **burned** (`0x000…dEaD`) or **locked**? How deep is the pool?
4. **Check taxes** — is there a buy/sell tax? How high?
5. **Check the identity** — does the name + ticker match the real project, or is it a copycat?
6. **Check price impact** — will your trade size move the price too much?
7. **Confirm the network and your approvals** before signing.

{% hint style="success" %}
✅ Rule of thumb: **verify the contract, not the vibe.** Names, logos, and hype are trivial to fake — an on-chain trace to the official factory is not.
{% endhint %}

## Continue exploring

* [⚠️ Risk Disclosure](/legal-and-safety/risk-disclosure.md) — the full risk picture
* [🔎 Contract Verification](/protocol/contract-verification.md) — how to check a contract
* [📉 Slippage & Price Impact](/traders/slippage-and-price-impact.md) — sizing your trades
* [🆘 Support](/resources/support.md) — report a scam or get help


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