Problems and Solutions of Tax Tokens in TON

Problems and Solutions of Tax Tokens in TON

Tax Tokens in TON represent a type of token that taxes a percentage on each transfer. This mechanic, while it may seem appealing at first glance, has led to a number of significant issues in the token ecosystem, especially in the realm of swaps and user experience. In this article, we’ll explore how tax tokens work, the problems they pose, and solutions to avoid unnecessary complications in transactions.

What are Tax Tokens?

Tax tokens, also known as fee-on-transfer tokens, are a particular class of tokens that deduct a percentage from each transaction. This percentage can be used for different purposes such as liquidity, project development, or rewards for holders. Key features of tax tokens include:

• A fixed percentage that is divided into different categories such as “liquidity”, “marketing” and “reflection” (rewards for holders).
• The ability for the contract owner to modify post-launch rates.
• Various types of taxes when buying or selling, creating an unpredictable experience for users.

The Practical Problems Caused by Tax Tokens

Despite their design, tax tokens often present the following problems:

• Unpredictable delivery: There may be discrepancies between what is expected to be received and what is actually received, especially if the proper slippage on the exchange is not adjusted.
• Lack of router support: Not all routers support fee-on-transfer tokens, which can lead to confusing messages or transaction failures.
• Variable parameters: Changes in tax rates or shipping address can lead to uncertainty, making transactions feel risky.
• Bad user experiences: The inconsistency between receipt estimates and the actual amount received can frustrate users.

Where Is the Risk of Honeypots?

Honeypots are smart contracts that allow you to buy tokens but restrict the subsequent sale or transfer. This problem is intensified with tax tokens, where the owner’s functionalities may include blocking or modifying rates. This mix of mechanics poses additional risks, causing tax tokens to be viewed with suspicion by many communities.

The Position of STON.fi

To ensure the safety of its users and maintain a predictable experience, STON.fi has decided to disable tax tokens in its interface. This measure seeks to prevent unforeseen variations in transactions, which could compromise the user experience. The reasons justifying this decision are:

• Tax tokens degrade the reliability of exchanges, which can result in higher failure rates.
• Tax logic introduces uncertainty into every transaction, preventing predictable results.
• The possibility of changes in tax rates and control over addresses increases the risk of honeypot-like behaviors.

How to Quickly Identify a Tax Token

To avoid unpleasant surprises, there are several clues that can help identify a tax token:

• Project documentation that mentions “tax,” “mirror,” “marketing,” or “liquidity” fees.
• Instructions for setting high slippage on trades.
• Contract features that allow the owner to edit tax rates after launch.

Final Thoughts

The TON ecosystem is constantly evolving, and while tax tokens can offer benefits in certain circumstances, it is critical to be aware of the associated risks. Users should conduct their own research (DYOR) and be cautious when interacting with these types of assets. A clear understanding of how tax tokens work can help avoid costly complications and maintain an effective exchange experience.

For more detailed information about tax tokens, visit the original article on STON.fi.