What is RUGPULL?
What a phrase to look out for in the crypto space.
Scamming has significantly been a part of human existence right from the beginning, one might be forced to think, how did we get here, but that is a story for another day.
What then is RUGPULL?
Rugpull in a simple term is crashing of a token price from what ever price it was to zero (nothing), whereby leaving investors or liquidity providers with nothing but a broken heart, loss of funds etc.
In most cases, it can be termed as an abandon project
Most cases, RugPull occur with withdrawal of a huge percentage of liquidity from the liquidity pool which in turn drives a token price from hero to zero.
You must note, there are a lot of factors that may contribute to rugpulls,
- A hack
- A malicious token DEV
- FUD etc
All these factors are sole contributors to the occurrence of a rugpull.
Rugpulls has made CEXes have an edge over DEXes, since CEXes ensure that a token is being audited before it is being listed, unlike on DEXes where any token can be listed for trading.
Conclusion
Before investing in a token, ensure to DYOR else, what ever befalls you, is definitely on you.
