What Is a crypto coin Rug Pull
A rug pull is a malicious maneuver in the cryptocurrency industry where crypto developers abandon a project and run away with investors’ funds. Rug pulls usually happen in the decentralized finance (DeFi) ecosystem, especially on decentralized exchanges (DEXs), where malicious individuals create a token and list it on a DEX, then pair it with a leading cryptocurrency like Ethereum.
Once a significant amount of unsuspecting investors swap their ETH for the listed token, the creators then withdraw everything from the liquidity pool, driving the coin's price to zero. The coin’s creators may even create a temporary hype around Telegram, Twitter, and other social media platforms and initially inject a substantial amount of liquidity into their pool to cultivate investor confidence.
Rug pulls thrive on DEXs because these types of exchanges allow users to list tokens for free and without audit, unlike in centralized cryptocurrency exchanges. Furthermore, creating tokens on open source blockchain protocols like Ethereum is easy and free. Malicious actors use these two factors to their advantage.
Note that decentralized exchanges such as Uniswap algorithmically determine the prices of tokens in a pool depending on the available balances. To ensure you don’t fall victim to a rug pull, check the liquidity in a pool. However, this is only the first step. You must also check if there is a lock on the token’s pool. Most reputable projects lock pooled liquidity for a certain period.
Another major characteristic of a possible rug pull is a coin skyrocketing in price within hours. For example, a rug pull coin can move from 0 to 50X within 24 hours. This trick is meant to drive FOMO that leads more people to invest in the token.
https://coinmarketcap.com/alexandria/glossary/rug-pull
https://cointelegraph.com/news/how-to-spot-a-rug-pull-in-defi-6-tips-by-cointelegraph
https://cryptotips.eu/en/knowledge-base/what-is-a-rug-pull-in-crypto/
https://tokensniffer.com/token/0xc3583c8328ecb4dc8751c7e4fe7bcc18e558a4b6
https://bscscan.com/token/0xc3583c8328ecb4dc8751c7e4fe7bcc18e558a4b6#balances
This is for entertainment purposes only
This is not financial advise.
-
3:05
PsychicreadingsbyAndre
2 years agoMiami coin crypto
12 -
18:48
scottcbusiness
2 years ago▶️ What Are “Frozen” Crypto Airdrops? | EP#476
10 -
0:59
Crypto DeFi Revolution
2 years agoWhat is Zano Coin (ZANO)? | Zano Crypto Explained in Under 60 Seconds
97 -
2:43:11
Matt Kohrs
12 hours agoGameStop Is Squeezing, China on Tilt & The Week Ahead || The MK Show
23.3K6 -
1:02:42
Rethinking the Dollar
1 hour agoThe Next Banking Event Will Be Off The Charts | Monday Morning Check-In: A Quick Glance IN The News
9.85K1 -
1:37:00
The Podcast of the Lotus Eaters
7 hours agoThe Podcast of the Lotus Eaters #913
38.2K19 -
6:37
Chris Jericho
22 hours agoThe Unsolved Mystery & Murder of Rachel Morin
23.5K1 -
20:17
PARAGRAPHIC
1 day agoLeading the Way in Costa Rica's Culinary Scene | PARAGRAPHIC
29.9K1 -
9:00
Bearing
1 day agoMeet the Woman Trying Censor the WORLD! Australia's E-Safety Commissioner Mad with Power
24.4K27 -
9:10
DepressedGinger
15 hours ago7 MLB teams that are STRUGGLING with Attendance in 2024
27.8K10