When project insiders drain liquidity or abandon a token, leaving holders with near-worthless assets.
A rug pull is a scam where developers or insiders abruptly remove liquidity, mint and dump new tokens, or otherwise exit a project to extract value from holders. It’s common in lightly audited DeFi projects and meme tokens with centralized control over contracts or treasuries.
"The team added and then withdrew most of the liquidity from the DEX pair, causing the token price to collapse and leaving buyers unable to sell—classic rug pull."
Red flags include unaudited contracts, admin keys with sweeping powers, opaque tokenomics, and time-locked promises not enforced on-chain. Safer projects use multi-sig treasuries, renounced ownership, and transparent liquidity lockups.
"Before buying, check if liquidity is locked and if contract upgrades require a multi-sig—both reduce rug-pull risk."
All terms and definitions may update as the Cryptionary improves.