A scam in which cryptocurrency project creators attract investor funds through a new token launch, inflate interest through social media hype, and then abruptly withdraw all liquidity or abandon the project, leaving investors with worthless tokens. Rug pulls are most common in DeFi and memecoin markets.
Example
“A new DeFi token gained 5,000% in a week after aggressive Twitter promotion, but the developers drained the entire $10 million liquidity pool overnight in a classic rug pull, leaving holders with zero value.”