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Deals damage. If used on a Pokemon with the paralysis status, its Base Power doubles, but the target is cured of its paralysis.
SmellingSalt has little competitive use due primarily to two reasons. First, it is very exclusive; only a select few Pokemon (mostly Fighting-types) learn it. Second, it is typically better to keep foes paralyzed then to get rid of that status (unless one is able to KO them). Generally, Return or Frustration, which are more powerful than SmellingSalt most of the time and given to a much wider variety of Pokemon, will serve a better purpose on a moveset.
Wake-Up Slap has a similar effect and the same Base Power, but it doubles in power when the opponent is sleeping rather than paralyzed.