A rug pull is a scam where crypto or NFT project creators attract investors with big promises, then suddenly disappear with the funds. It’s common in the DeFi space and especially dangerous for new investors. In 2021 alone, rug pulls caused $2.8 billion in losses — over a third of all crypto scam revenue that year.
Rug pulls can be “hard” (planned scams with malicious code to drain funds) or “soft” (when the team simply abandons the project after hyping it up). Tactics include dumping tokens, draining liquidity pools, or blocking investors from selling. These scams often use flashy marketing and influencers to create hype and urgency.
While some rug pulls are illegal, others fall into legal gray areas. Either way, they’re harmful and unethical. Notable cases include Thodex ($2B), AnubisDAO ($60M), and Evolved Apes ($2.7M).
To stay safe, research projects thoroughly, verify team credibility, and be cautious of promises that sound too good to be true. In crypto, skepticism is a smart first step.
