Definition of Rug pull
A rug or scam. Something that will happen to anyone who is entering the crypto space, getting scammed or rug pulled by an untrustworthy project. A rug is when a developer team “pulls the rug out” on a project.
For example, maybe they had great forecasts about the price or planned great developments, activities and community benefits post-drop. But, after the token rose in value, they just sold off their personal holdings and ran away. Leaving the rest of the community with a worthless token or NFT. That is a rug.
Rug pull used in a sentence
‘’They rugged the project and walked away with the money!’’
‘’You got rugged, the price to the token went all the way to zero!’’
‘’I invested in a project that got rug pulled.’’
Sadly, this is common for now as the crypto space is very young.
History/information/research about rug pulls
During the expanding and development of the crypto industry, unfortunately scams have occurred as well. The biggest known DeFi rug pull until now, was Onecoin, it is one of the greatest cryptocurrency Ponzi scams ever. The project’s creators were able to swindle more than $4 billion from naive investors.
A more recent event, a cryptocurrency based on the popular South Korean TV show ‘Squid Game’. Unfortunately, the coin turned out to be a massive hoax less than two weeks after its inception. The price of the cryptocurrency Squid Game (SQUID) has plummeted dramatically all the way to zero. The developers appear to have built a scheme that netted them almost $3 million. Following a “rug pull” fraud that grabbed money from unsuspecting investors..
If you want to know how to identify a scam check out this article, which can guide you: