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Rug Pull

Creators drain liquidity and abandon ship

What is Rug Pull?

When project creators withdraw all liquidity and disappear, leaving investors with worthless tokens. The most common scam in crypto. If you're consulting for a project, transparency and locked liquidity are non-negotiable trust signals.

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In plain words

"The floor disappears — a project raises money, builds hype, then the team drains every cent and vanishes."

How it works

Key takeaways

  • Team drains liquidity and disappears

  • Token price crashes to near zero

  • Common with unaudited, anonymous teams

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Real-world example

A new DEX launches with a slick website. After $5M in liquidity is deposited, the devs withdraw everything in one transaction. Token goes to zero.

Related terms

DeFi

Decentralized Finance

Liquidity

How easily an asset can be bought or sold

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