{"id":10571,"date":"2023-03-28T00:07:33","date_gmt":"2023-03-28T00:07:33","guid":{"rendered":"https:\/\/www.bitnovo.com\/blog\/?p=10571"},"modified":"2025-09-10T15:22:57","modified_gmt":"2025-09-10T15:22:57","slug":"what-is-a-rug-pull-and-how-to-identify-it","status":"publish","type":"post","link":"https:\/\/www.bitnovo.com\/blog\/en\/what-is-a-rug-pull-and-how-to-identify-it","title":{"rendered":"What is a Rug Pull and how to identify it?"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter ez-toc-transparent ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Alternar tabla de contenidos\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #ffffff;color:#ffffff\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #ffffff;color:#ffffff\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 eztoc-toggle-hide-by-default' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.bitnovo.com\/blog\/en\/what-is-a-rug-pull-and-how-to-identify-it\/#how_does_a_rug_pull_work\" >How does a Rug Pull work?<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.bitnovo.com\/blog\/en\/what-is-a-rug-pull-and-how-to-identify-it\/#slow_and_almost_undetectable_rug_pull\" >Slow and almost undetectable Rug Pull<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/www.bitnovo.com\/blog\/en\/what-is-a-rug-pull-and-how-to-identify-it\/#how_to_identify_a_scam\" >How to identify a scam?<\/a><\/li><\/ul><\/nav><\/div>\n<span class=\"span-reading-time rt-reading-time\" style=\"display: block;\"><span class=\"rt-label rt-prefix\">Tiempo de lectura:<\/span> <span class=\"rt-time\"> 4<\/span> <span class=\"rt-label rt-postfix\">minutos<\/span><\/span><p>In the world of cryptocurrencies there are thousands of projects and new forms of investment are continuously being created. There is a large number of users who are dedicated to pursuing these\u00a0<strong>new projects<\/strong>\u00a0because they know that it is in the nascent projects where the great opportunities for huge returns arise.<\/p>\n<p>But despite all the opportunities that cryptocurrencies offer, there are also\u00a0<strong>risks, losses and traps<\/strong>\u00a0that could wipe out our entire investment. In this world many people are looking for a way to\u00a0<strong>make easy money<\/strong>\u00a0even if it means ruining other small investors.<\/p>\n<p>The world of decentralized finance, better known as\u00a0<a href=\"https:\/\/www.bitnovo.com\/blog\/en\/what-is-defi-o-decentralized-finance\/\">DeFi<\/a>, is one of the most prone<strong>\u00a0to attacks and scams<\/strong>. As a result, many retail investors who delve into these platforms run the risk of being scammed due\u00a0<strong>to poor knowledge or misinformation<\/strong>. One of the biggest risks in the DeFi world is the\u00a0<strong>Rug Pull<\/strong>. In this article we will tell you all about this scam, how to identify it and above all, how to avoid it.<\/p>\n<div class=\"is-divider divider clearfix\"><\/div>\n<div class=\"is-divider divider clearfix\"><\/div>\n<div class=\"is-divider divider clearfix\"><\/div>\n<h2><span class=\"ez-toc-section\" id=\"how_does_a_rug_pull_work\"><\/span><strong>How does a Rug Pull work?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><strong>A Rug Pull is a kind of manipulation\u00a0<\/strong><b>in the world of cryptocurrencies. This concept is what we would characterize as an investor\u00a0<strong>scam<\/strong>. The phrase \u201c<strong>rug pulling<\/strong>\u201d refers exactly to the action of\u00a0<strong>sudden loss of liquidity<\/strong>\u00a0leading to\u00a0<strong>a massive sell off<\/strong>\u00a0by liquidity providers or investors looking to save their money. In this dead end scam,\u00a0<strong>the liquidity pool of a decentralized exchange or\u00a0<a href=\"https:\/\/www.bitnovo.com\/blog\/en\/cex-and-dex-what-are-the-differences\/\">DEX<\/a><\/strong>\u00a0is emptied, leaving token holders unable to sell their tokens.<\/b><\/p>\n<p>Simply put, a Rug Pull is\u00a0<strong>when the owners and developers of a project abandon the project and run off with the investors\u2019 money<\/strong>. These scams usually come\u00a0<strong>camouflaged behind excuses<\/strong>\u00a0such as there are bugs in the software and time is needed for repair, however it is the owners of the project who usually keep the money that the investors will never get back. As we have already mentioned above,\u00a0<strong>carpet pulling is more frequent in the DeFi ecosystem and DEX<\/strong>\u00a0(Decentralized Exchanges).<\/p>\n<p>Many of the projects that end up becoming a Rug Pull work as follows:\u00a0<strong>a new DeFi project<\/strong>\u00a0emerges that features its own\u00a0<strong>native token<\/strong>\u00a0and the\u00a0<strong>developers pair that token with other known tokens<\/strong>\u00a0such as\u00a0<a href=\"https:\/\/www.bitnovo.com\/blog\/en\/what-is-ethereum-eth-and-how-does-it-work\/\">ETH<\/a>,\u00a0<a href=\"https:\/\/www.bitnovo.com\/blog\/en\/what-is-tether-usdt-the-complete-guide\/\">USDT<\/a>\u00a0or\u00a0<a href=\"https:\/\/www.bitnovo.com\/blog\/en\/what-is-dai-the-complete-guide\/\">DAI<\/a>. In the new project users are allowed to\u00a0<strong>exchange<\/strong>\u00a0their tokens for this new native token of the project which<strong>\u00a0attracts<\/strong>\u00a0many more investors through<strong>\u00a0higher rewards<\/strong>\u00a0to the trap. However, when the number of investors increases\u00a0<strong>the developers abandon the project<\/strong>\u00a0and abscond with all recognized cryptocurrencies and investors\u2019 money. Thus, only<strong>\u00a0scammed<\/strong>\u00a0users and an empty project are left behind.<\/p>\n<p>It is often very easy for such developers to create scam-oriented\u00a0<strong>DeFi<\/strong>\u00a0platforms. This is because these platforms allow them to create a token\u00a0<strong>without auditing<\/strong>\u00a0the amount that exists on the network. One of the most common chains for creating this type of scam is the\u00a0<strong>Ethereum<\/strong>\u00a0network, as it features\u00a0ERC-20\u00a0standards that facilitate the creation of various tokens.<\/p>\n<p>These scams are also associated\u00a0<strong>with anonymous founders<\/strong>\u00a0who own a large amount of tokens and sell them leaving the price at\u00a0<strong>almost 0<\/strong>. It should be noted that not all Rug Pulls are\u00a0<strong>fast and unexpected<\/strong>, some are slow.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"slow_and_almost_undetectable_rug_pull\"><\/span>Slow and almost undetectable Rug Pull<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Rug Pulls that occur<strong>\u00a0slowly<\/strong>\u00a0are more difficult to detect. These take place when creators develop a\u00a0<strong>legitimate<\/strong>\u00a0looking coin without showing any further\u00a0<strong>warning<\/strong>\u00a0signs, yet the coins are\u00a0<strong>distributed<\/strong>\u00a0in large quantities in\u00a0<strong>wallets<\/strong>\u00a0to which only the creators have access.<\/p>\n<p>When users start\u00a0<strong>buying the cryptocurrencies<\/strong>\u00a0the developers\u2019 price\u00a0<strong>increases<\/strong>. In turn the developers start selling the coins generating money. The rest of the users will keep\u00a0<strong>buying<\/strong>\u00a0and the developers will keep\u00a0<strong>selling<\/strong>\u00a0until their wallets are empty.<\/p>\n<p>This type of Rug Pull is\u00a0<strong>more difficult to detect<\/strong>\u00a0but not impossible. We can achieve it through<strong>\u00a0Etherscan or BscScan<\/strong>. Through these tools we can verify\u00a0<strong>the amounts<\/strong>\u00a0deposited in the wallets. In the case that many wallets hold the same percentage of tokens it is likely to be a Rug Pull.<\/p>\n<div class=\"is-divider divider clearfix\"><\/div>\n<p>&nbsp;<\/p>\n<div class=\"is-divider divider clearfix\"><\/div>\n<div class=\"is-divider divider clearfix\"><\/div>\n<div id=\"image_205601780\" class=\"img has-hover x md-x lg-x y md-y lg-y\">\n<div class=\"img-inner dark\"><img fetchpriority=\"high\" decoding=\"async\" class=\"attachment-large size-large lazyloaded\" src=\"https:\/\/www.bitnovo.com\/blog\/wp-content\/uploads\/2021\/07\/Qu%C3%A9-son-estafas-Rug-Pull1.jpg\" sizes=\"(max-width: 768px) 100vw, 768px\" srcset=\"https:\/\/www.bitnovo.com\/blog\/wp-content\/uploads\/2021\/07\/Qu\u00e9-son-estafas-Rug-Pull1.jpg 768w, https:\/\/www.bitnovo.com\/blog\/wp-content\/uploads\/2021\/07\/Qu\u00e9-son-estafas-Rug-Pull1-300x205.jpg 300w\" alt=\"Qu\u00e9-son-estafas-Rug-Pull\" width=\"768\" height=\"526\" data-srcset=\"https:\/\/www.bitnovo.com\/blog\/wp-content\/uploads\/2021\/07\/Qu\u00e9-son-estafas-Rug-Pull1.jpg 768w, https:\/\/www.bitnovo.com\/blog\/wp-content\/uploads\/2021\/07\/Qu\u00e9-son-estafas-Rug-Pull1-300x205.jpg 300w\" data-src=\"https:\/\/www.bitnovo.com\/blog\/wp-content\/uploads\/2021\/07\/Qu\u00e9-son-estafas-Rug-Pull1.jpg\" data-sizes=\"(max-width: 768px) 100vw, 768px\" \/><\/div>\n<\/div>\n<div class=\"is-divider divider clearfix\"><\/div>\n<p>&nbsp;<\/p>\n<div class=\"is-divider divider clearfix\"><\/div>\n<h2><span class=\"ez-toc-section\" id=\"how_to_identify_a_scam\"><\/span><strong>How to identify a scam?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<div class=\"is-divider divider clearfix\"><\/div>\n<p>As with any attack or scam, there are ways to identify these types of projects and protect our investment before it is too late. Here are some ways to do so:<\/p>\n<p>&nbsp;<\/p>\n<ul>\n<li aria-level=\"1\"><b>Check the liquidity background of the project.\u00a0<\/b>This is a quick and easy way to know if we should trust the project and check the liquidity of the group we are investigating. The higher the\u00a0<a href=\"https:\/\/www.bitnovo.com\/blog\/en\/what-is-the-liquidity-of-a-cryptocurrency\/\">liquidity<\/a>, the stronger the project. However, this is not enough, we must also investigate who is behind the project.<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<ul>\n<li aria-level=\"1\"><b>Research the history of the founders.\u00a0<\/b>It is extremely important to research the history of the founders of the project, since we should not blindly follow any founder of whom we know nothing. It is very common to follow projects just because they are earning higher returns, however, this mistake can cost us our investment. Before investing, we must have the answer to questions such as: Who is backing the project, or Is there any previous information about any problems in this regard?<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<ul>\n<li aria-level=\"1\"><b>Sudden fluctuations in the cryptocurrency price.\u00a0<\/b>It is clear that a rise in prices is a good sign for investors, however, in this type of projects an explosion in the price of the token is not a good sign. This is called Coin Skyrocketing. So if we notice a sudden increase in the same day as a x50 or x100 it can be a trap to attract investors.<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<ul>\n<li aria-level=\"1\"><b>High rewards.\u00a0<\/b>We must be careful with high rewards. There are usually many DeFi protocols that launch and start offering high rewards in their pools. This is because they need higher liquidity to run the scam. So when they advertise a 500% or 1000% return we should think clearly before agreeing to put our money there.<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p><span class=\"span-reading-time rt-reading-time\" style=\"display: block;\"><span class=\"rt-label rt-prefix\">Tiempo de lectura:<\/span> <span class=\"rt-time\"> 4<\/span> <span class=\"rt-label rt-postfix\">minutos<\/span><\/span>In the world of cryptocurrencies there are thousands of projects and new forms of investment are continuously being created. There is a large number of users who are dedicated to pursuing these\u00a0new projects\u00a0because they know that it is in the nascent projects where the great opportunities for huge returns arise. But despite all the opportunities [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":7860,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[165],"tags":[],"class_list":["post-10571","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-cryptocurrencies"],"_links":{"self":[{"href":"https:\/\/www.bitnovo.com\/blog\/wp-json\/wp\/v2\/posts\/10571","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.bitnovo.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.bitnovo.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.bitnovo.com\/blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.bitnovo.com\/blog\/wp-json\/wp\/v2\/comments?post=10571"}],"version-history":[{"count":3,"href":"https:\/\/www.bitnovo.com\/blog\/wp-json\/wp\/v2\/posts\/10571\/revisions"}],"predecessor-version":[{"id":24638,"href":"https:\/\/www.bitnovo.com\/blog\/wp-json\/wp\/v2\/posts\/10571\/revisions\/24638"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.bitnovo.com\/blog\/wp-json\/wp\/v2\/media\/7860"}],"wp:attachment":[{"href":"https:\/\/www.bitnovo.com\/blog\/wp-json\/wp\/v2\/media?parent=10571"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.bitnovo.com\/blog\/wp-json\/wp\/v2\/categories?post=10571"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.bitnovo.com\/blog\/wp-json\/wp\/v2\/tags?post=10571"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}