Rug Pull
Also known as: Crypto Scam, Liquidity Exit Scam, DeFi Exit Scam
A type of crypto scam where developers withdraw liquidity or abandon a project after collecting user funds.
A rug pull is a deceptive tactic in the cryptocurrency world where project creators or developers intentionally abandon a project after securing user investments or liquidity. This typically occurs in decentralized exchanges (DEXs) or DeFi protocols where developers can create tokens and liquidity pools, then remove liquidity suddenly, rendering tokens worthless. Rug pulls can also involve disabling withdrawal functions or shutting down social channels. They highlight the importance of code audits, doxxed teams, and community oversight in crypto. Rug pulls are especially common in unaudited smart contracts and meme coins.