Rug pull

A rug pull is a type of exit scam common in decentralised finance (DeFi) and the broader cryptocurrency space. Developers create a new token or project, market it aggressively (sometimes using fake celebrity endorsements, fabricated audits, or coordinated social media hype), and attract investors who buy the token expecting it to appreciate in value.

Once sufficient liquidity is locked in the project's trading pool, the team — who retained a large portion of the token supply or controlled the smart contract — removes all the funds in a single transaction, crashing the token price to near zero. The developers then disappear, often having maintained anonymity throughout.

Hard rug pulls involve malicious code written into the smart contract from the outset. Soft rug pulls involve developers who initially had genuine intentions but chose to abandon the project and take funds when the opportunity arose.