Rug Pull
Definition
What is Rug Pull?
A digital-asset fraud in which insiders remove liquidityThe ease and speed with which an investment can be converted into cash without a major price concession. or abandon a project after attracting investorA person or organisation that commits capital with the expectation of a financial return. funds.
Example in practice
How This Looks in Practice
Developers drain the token's liquidity poolTokens deposited in a smart contract to support trading, lending, or other protocol activity. and disappear.
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Related Terms
Ponzi Scheme
A fraud that pays earlier participants using money from newer participants rather than genuine investment profits.
Fraud & ScamsPyramid Scheme
A scheme that rewards recruitment more than genuine product sales or investment activity.
Fraud & ScamsPump and Dump
Manipulating an asset upward through misleading promotion before selling into the inflated demand.
Market ParticipantsBroker
A person or firm that executes securities transactions for clients.