Rug Pull

A rug pull refers to a fraudulent scheme in which an untrustworthy blockchain project is launched, only for the project’s creators to abscond with investors’ funds. This type of scam is commonly observed in the decentralized finance (DeFi) ecosystem, often through decentralized exchanges (DEXs). Malicious actors create a cryptocurrency, list it on a DEX, and pair it with an established asset like ether (ETH). After attracting a significant number of unsuspecting investors who exchange their ETH for the listed token, the project founders withdraw funds from the liquidity pool, leaving investors with essentially worthless assets.