Rug Pulls in DeFi: Learn the Pattern Before It’s Too Late
Ever felt the thrill of catching a rising token only to wake up and find it gone? That’s the reality of a rug pull, one of the most devastating scams in decentralized finance (DeFi).
A rug pull happens when developers suddenly withdraw all liquidity from a token, crashing its value to zero and leaving holders with nothing.
How a Rug Pull Happens:
1. Setup: A new token launches with hype, a slick site, and social buzz.
2. Momentum: The price pumps. Liquidity is “locked” or so they say.
3. Exit: Liquidity is drained. The devs vanish. Telegram and websites go offline.
Red Flags to Watch Out For:
1. No contract audits or transparency
2. Few wallets hold most of the supply
3. Over-the-top hype without real updates or roadmap
4. Short-term liquidity locks or unclear tokenomics
Examples to Learn From:
Squid Game Token (2021): Price soared 75,000% then crashed to near-zero.
Encryption AI (2023): $2 million drained, dev vanished.
Gen Z Quant (2024): A soft rug pulled by a teen cashing out early.
Scams thrive on hype. Research, question, and double-check before diving into any token especially when it sounds too good to be true.
Disclaimer: No financial advice. May include sponsored content. See T&Cs.
