What is Rug Pull?
Also known as: rug, rugged
A scam where a token’s creators drain liquidity or dump their holdings, collapsing the price to near zero.
A rug pull is an exit scam. In the classic version, the team controls the liquidity pool and withdraws it after enough people have bought in, leaving holders with worthless tokens that can no longer be sold. "Soft rugs" are slower — the team simply abandons the project and dumps its allocation.
Common red flags include unlocked liquidity, a large unvested team allocation, mint authority left enabled (the team can print unlimited tokens), and anonymous teams with no verifiable track record.
Buyers protect themselves by checking that liquidity is locked or burned, that mint/freeze authority is revoked, and that holder distribution is not dangerously concentrated. Escrow-protected marketplaces add a mediation layer when buying or selling existing projects.
Related tools & guides
Related terms
Liquidity Pool
A smart-contract reserve of two paired tokens that lets people trade against it on a decentralized exchange.
Mint Authority
The on-chain permission that allows new tokens to be created — a major rug risk if it is not revoked after launch.
Tokenomics
The economic design of a token: total supply, distribution, taxes, vesting, and the incentives that shape holder behavior.
Memecoin
A cryptocurrency inspired by an internet meme, joke, or cultural moment, where community and virality drive value more than utility.