Swapping Tax Tokens

Tax tokens automatically charge a fee when you buy, sell, or sometimes even when you add liquidity or transfer them to another wallet. The tax collected from these tokens is often used for specific purposes, often outlined by the team behind the token

When considering a token to determine if it includes a transaction tax, it’s best to clarify with the team behind the token or look closely at the user interface during a trade

If you see an error message like "Error: Estimated XXX amount invalid. Check your slippage configuration" it suggests that the token has a transaction tax. However, this alone may not necessarily mean the token has a tax - the message could appear for other reasons, such as high price volatility

For most Tax tokens, you’ll likely need to use V2 swap mode, but in some cases, depending on which AMM the liquidity was added, you may need to use V3 mode. To check which AMM the liquidity is added on, look through the analytics dashboard and locate the liquidity pair associated with the token you want to swap on either V2 or V3

Do not use aggregator swap mode if dealing with a Tax token. While you can use it in some cases, you might get charged tax multiple times when performing a swap

How to process a swap with a tax token?

Before initiating a swap, you'll have to increase the slippage, as the tax imposed by the token needs to be factored into the slippage settings.

For example, if the token has a 7% tax, set your slippage tolerance to 7.5% (0.5% default)

To adjust the slippage, look for the ‘gear’ icon on the swap page. Once you click on it, you’ll see a modal where you can adjust the slippage. Once you set the slippage settings, perform a swap