Rug Pull —
Translated from English, the phrase means “Pull the rug out from under your feet.”
This is a fraudulent scheme where the creators of the project withdraw liquidity from the pool received from investors and promptly disappear with the stolen money, leaving investors with worthless tokens.
👀 How does this happen?
Developers suddenly sell tokens at a high price, using loopholes in smart contracts, thereby losing investors’ finances. These phenomena occur more often on small decentralized exchanges, where a project can move its coin and perform a “rug pull” with impunity.
How to protect yourself?
⚪️ Studying the white paper: Carefully study the project in which you plan to invest.
⚪️ Social network monitoring: Evaluate the adequacy of the developers and obtain additional information from the project’s social networks.
⚪️Project Tokenomics: Familiarize yourself with the economics of a token to better understand its value.
⚪️ Liquidity lock: Make sure the project locks the pool's liquidity for a period of time, eliminating the possibility of a "rug pull".
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