JoymistaWhat Is a Rug Pull in Crypto and How Do You Spot One?
A rug pull is a scam where a crypto project’s team collects buyers’ money, then suddenly pulls the liquidity or dumps their holdings, crashing the price.
Explained
Warning signs include unlocked liquidity, a huge share in a few wallets, a high sell tax, or a contract that does not allow selling at all (a honeypot). Checking the contract before buying reveals many of these signs, though it cannot prove a project is safe.
Example
Example with made-up numbersA new token has 200,000 dollars of liquidity, then the team pulls all of it, buyers find nobody to sell to, and the price falls close to zero.
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Open in JoymistaEducational content, not investment advice.