Rug pull

A rug pull describes a situation in which the value behind a token suddenly disappears, for example because the liquidity is withdrawn all at once. What remains is a token with no meaningful value. Whether a price fall is a rug pull or ordinary market movement can be established afterwards, not at the moment itself.

What it may indicate

A token whose value falls away from one moment to the next can be an indication that the party behind it has withdrawn with the funds put in. It can also be a project that failed for other reasons. The distinction lies in where the liquidity went.

A token lost almost all of its value within minutes after the liquidity was removed. Whether there was intent behind it emerges from following the withdrawn funds, which touches on what is described under tracing crypto.

What is a rug pull?

A situation in which the value behind a token suddenly disappears, often because liquidity is withdrawn at once, leaving a token without meaningful value.

How do you tell a rug pull from a failed project?

The distinction lies in where the liquidity went. Following the withdrawn funds shows whether there was intent or an ordinary failure.

Is een koersinstorting altijd een rug pull?

Nee. Een instorting kan ook een project zijn dat om andere redenen mislukte. Het volgen van de onttrokken middelen maakt het onderscheid.