{"id":1278,"date":"2022-09-30T09:08:50","date_gmt":"2022-09-30T09:08:50","guid":{"rendered":"https:\/\/metaschool.so\/articles\/?p=1278"},"modified":"2024-06-28T11:12:49","modified_gmt":"2024-06-28T11:12:49","slug":"rug-pull-crypto-meaning","status":"publish","type":"post","link":"https:\/\/metaschool.so\/articles\/rug-pull-crypto-meaning\/","title":{"rendered":"Rug pull"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_56_1 ez-toc-wrap-left counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title \" >Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/metaschool.so\/articles\/rug-pull-crypto-meaning\/#Rug_pull_meaning\" title=\"Rug pull meaning \">Rug pull meaning <\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/metaschool.so\/articles\/rug-pull-crypto-meaning\/#How_does_a_rug_pull_work_and_how_to_avoid_them\" title=\"How does a rug pull work and how to avoid them? \">How does a rug pull work and how to avoid them? <\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/metaschool.so\/articles\/rug-pull-crypto-meaning\/#Rug_pull_Indicators\" title=\"Rug pull Indicators\">Rug pull Indicators<\/a><ul class='ez-toc-list-level-3'><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/metaschool.so\/articles\/rug-pull-crypto-meaning\/#1_Soaring_token_prices\" title=\"1. Soaring token prices\">1. Soaring token prices<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/metaschool.so\/articles\/rug-pull-crypto-meaning\/#2_See_it_for_yourself\" title=\"2. See it for yourself\">2. See it for yourself<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/metaschool.so\/articles\/rug-pull-crypto-meaning\/#Final_Words\" title=\"Final Words\">Final Words<\/a><\/li><\/ul><\/nav><\/div>\n\n<h2 class=\"wp-block-heading\" id=\"understand-rug-pull-meaning-its-usage\"><span class=\"ez-toc-section\" id=\"Rug_pull_meaning\"><\/span>Rug pull meaning <span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Rug pull refers to a deceptive tactic where a development team suddenly abandons a blockchain project and liquidates all of its assets or liquidity. This leaves investors with worthless tokens or coins, causing the price to plummet and resulting in significant financial losses.<\/p>\n\n\n\n<p>The term &#8220;take the rug out from under someone&#8221; is often used to describe this phenomenon, as the rug is pulled out from under investors, leaving them without any support or recourse. Rug pulls also use social media platforms and channels as their main source of preying on investors.&nbsp;<\/p>\n\n\n\n<p>In the cryptocurrency business, a rug pull occurs when a development team abruptly drops a project and sells or eliminates all of its liquidity. <\/p>\n\n\n\n<p class=\"has-nv-text-dark-bg-color has-nv-c-1-background-color has-text-color has-background\">Example sentence: I can&#8217;t believe my eyes, $TTDX did a sneaky NFT rug pull on us \ud83d\ude31<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"how-does-a-rug-pull-work-and-how-to-avoid-them\"><span class=\"ez-toc-section\" id=\"How_does_a_rug_pull_work_and_how_to_avoid_them\"><\/span>How does a rug pull work and how to avoid them? <span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The way rug pull works is somewhat similar to <a href=\"https:\/\/metaschool.so\/articles\/crypto-shilling-meaning\/\">Shilling<\/a>. However, the major difference between both is that the scammers and the people trying to sell the project to you end up selling all the stocks once they have enough investors and run away with the money.&nbsp;<\/p>\n\n\n\n<p>Rug pulls also use social media platforms and channels as their main source of preying on investors.&nbsp;<\/p>\n\n\n\n<p>Investors are drawn to a new cryptocurrency project by a developer who leaves the project before it is completed. The investors are left with worthless currency as a result. \ud83d\ude1f<\/p>\n\n\n\n<p><a href=\"https:\/\/metaschool.so\/articles\/defi-meaning\/\">DeFi<\/a> initiatives that offer liquidity to <a href=\"https:\/\/metaschool.so\/articles\/dex-decentralized-exchange\/\">decentralized exchanges<\/a> are most frequently connected with rug pulls. Since many crypto projects are anonymous, it makes it rather easy for a team or owner to do it without risking their identity. <\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"rug-pull-indicators\"><span class=\"ez-toc-section\" id=\"Rug_pull_Indicators\"><\/span>Rug pull Indicators<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"1-soaring-token-prices\"><span class=\"ez-toc-section\" id=\"1_Soaring_token_prices\"><\/span>1. Soaring token prices<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Common rug pull indicators include token prices that soar quickly without any liquidity support. There is potential for a rug pull if the project owners can withdraw their monies as soon as possible following the initiative&#8217;s debut. <\/p>\n\n\n\n<p>A malicious party might <a href=\"https:\/\/metaschool.so\/tokens?ref=Articles&amp;utm_source=Blog_Organic\" target=\"_blank\" rel=\"noreferrer noopener\">program a token<\/a> to limit certain investors&#8217; ability to sell it while leaving others unrestricted. These sales limits are telltale indicators of a fraudulent scheme.<\/p>\n\n\n\n<figure class=\"wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter\"><div class=\"wp-block-embed__wrapper\">\n<blockquote class=\"twitter-tweet\" data-width=\"550\" data-dnt=\"true\"><p lang=\"en\" dir=\"ltr\">Now @turtle_dex <a href=\"https:\/\/twitter.com\/search?q=%24TTDX&amp;src=ctag&amp;ref_src=twsrc%5Etfw\" target=\"_blank\" rel=\"noopener\">$TTDX<\/a> is officially dead. Main admin is deleted acc, Telegram channel locked, &amp; website gone. Sad day for <a href=\"https:\/\/twitter.com\/search?q=%24TTDX&amp;src=ctag&amp;ref_src=twsrc%5Etfw\" target=\"_blank\" rel=\"noopener\">$TTDX<\/a> investors. Liquidty on <a href=\"https:\/\/twitter.com\/PancakeSwap?ref_src=twsrc%5Etfw\" target=\"_blank\" rel=\"noopener\">@PancakeSwap<\/a> &amp; <a href=\"https:\/\/twitter.com\/ape_swap?ref_src=twsrc%5Etfw\" target=\"_blank\" rel=\"noopener\">@ape_swap<\/a> is drying up as people try to sell at a heavy loss as it nears zero.<a href=\"https:\/\/twitter.com\/CoinDesk?ref_src=twsrc%5Etfw\" target=\"_blank\" rel=\"noopener\">@CoinDesk<\/a> <a href=\"https:\/\/twitter.com\/Cointelegraph?ref_src=twsrc%5Etfw\" target=\"_blank\" rel=\"noopener\">@Cointelegraph<\/a> <a href=\"https:\/\/twitter.com\/search?q=%24BNB&amp;src=ctag&amp;ref_src=twsrc%5Etfw\" target=\"_blank\" rel=\"noopener\">$BNB<\/a> <a href=\"https:\/\/twitter.com\/search?q=%24CAKE&amp;src=ctag&amp;ref_src=twsrc%5Etfw\" target=\"_blank\" rel=\"noopener\">$CAKE<\/a> <a href=\"https:\/\/t.co\/uy1D9mX4Mf\" target=\"_blank\">pic.twitter.com\/uy1D9mX4Mf<\/a><\/p>&mdash; DEFSTALKR (@DEFSTALKR) <a href=\"https:\/\/twitter.com\/DEFSTALKR\/status\/1372910428645289984?ref_src=twsrc%5Etfw\" target=\"_blank\" rel=\"noopener\">March 19, 2021<\/a><\/blockquote><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script>\n<\/div><figcaption><a href=\"https:\/\/news.bitcoin.com\/another-binance-smart-chain-project-turtledex-rug-pulls-with-tokens-worth-2-5-million-confirmed-stolen\/\" target=\"_blank\" rel=\"noreferrer noopener\">TurtleDex Rug pull<\/a><\/figcaption><\/figure>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"2-see-it-for-yourself\"><span class=\"ez-toc-section\" id=\"2_See_it_for_yourself\"><\/span>2. See it for yourself<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>It might be challenging to determine whether there is fraudulent behaviour since selling limits are hidden in the code. One approach to check this is to buy a small quantity of the new currency and then try to sell it right away. The project is probably a hoax if there are issues dumping what was recently bought.<\/p>\n\n\n\n<p>Additionally, there will probably be a lot of investor excitement on social media sites like Twitter, Telegram, and others. <\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"final-words\"><span class=\"ez-toc-section\" id=\"Final_Words\"><\/span>Final Words<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Thus, be careful and <a href=\"https:\/\/metaschool.so\/articles\/dyor-meaning\/\">DYOR<\/a> on a venture to prevent yourself from rug pulls. This will involve examining the product\u2019s current condition as well as its <a href=\"https:\/\/metaschool.so\/articles\/tokenomics-meaning\/\">tokenomics<\/a>, token distribution strategy, liquidity, and staff. By making sure the aforementioned are all as open and verifiable as possible, you can reduce your risk.<\/p>\n","protected":false},"excerpt":{"rendered":"","protected":false},"author":1,"featured_media":5589,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"neve_meta_sidebar":"","neve_meta_container":"","neve_meta_enable_content_width":"","neve_meta_content_width":0,"neve_meta_title_alignment":"","neve_meta_author_avatar":"","neve_post_elements_order":"","neve_meta_disable_header":"","neve_meta_disable_footer":"","neve_meta_disable_title":"","footnotes":""},"categories":[73],"tags":[66,74,68],"class_list":["post-1278","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-web3-crypto-glossary","tag-crypto-slang-terms","tag-web3-glossary","tag-web3-words"],"_links":{"self":[{"href":"https:\/\/metaschool.so\/articles\/wp-json\/wp\/v2\/posts\/1278","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/metaschool.so\/articles\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/metaschool.so\/articles\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/metaschool.so\/articles\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/metaschool.so\/articles\/wp-json\/wp\/v2\/comments?post=1278"}],"version-history":[{"count":13,"href":"https:\/\/metaschool.so\/articles\/wp-json\/wp\/v2\/posts\/1278\/revisions"}],"predecessor-version":[{"id":7600,"href":"https:\/\/metaschool.so\/articles\/wp-json\/wp\/v2\/posts\/1278\/revisions\/7600"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/metaschool.so\/articles\/wp-json\/wp\/v2\/media\/5589"}],"wp:attachment":[{"href":"https:\/\/metaschool.so\/articles\/wp-json\/wp\/v2\/media?parent=1278"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/metaschool.so\/articles\/wp-json\/wp\/v2\/categories?post=1278"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/metaschool.so\/articles\/wp-json\/wp\/v2\/tags?post=1278"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}