What is a rug pull in crypto?

By Kromatika | Kromatika Education | 5 Apr 2022

A rug pull is a scam in the cryptocurrency sector in which the founders quit their project and flee with the assets of investors. Rug pulls are most common on decentralized finance platforms. These platforms are used by them since they are considerably easier to implement.

First, the scammers will create the token on a blockchain. Liquidity may be placed on platforms like Uniswap after the token is created. The idea is to allow the cryptocurrency to be traded on a large scale by adding liquidity to these platforms. They will then wait for investors to purchase the token, which is frequently accompanied by big marketing efforts centered on influencers. The specificity of the rugpull is that the token has lightning rises like x100, which can generate anxiety about missing something. The writers will sell their tokens and keep all of the revenue as soon as there is a specific amount of liquidity that suits them. So be on the lookout for possibilities that seem too good to be true.

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