LeoGlossary: Rug Pull

6 mo
1 Min Read
141 words

A rug pull is a cryptocurrency scam where a team of developers put together a project with the intention of making off with the fund. This is typically done in the Decentralized Finance (DeFi) space.

The idea is either to get the price of a token to pump or get people to place other tokens in a Liquidity Pool (LP) which is suddenly drained.

During the pump, scammers generate excitement through a combination of market activity along with marketing. Wash trading is common in these situations.

Once the price is high enough, the team starts to dump their tokens on the open market. The activity can be fierce meaning prices collapse in a short period of time. Those running the scam are out with profit while the rest are stuck holding worthless tokens.

Posted Using LeoFinance Beta

Another day another rugpull

Posted Using LeoFinance Beta