Definition
A crypto scam where developers abandon a project and run away with investors' funds — typically after building hype, attracting investment, and then withdrawing liquidity or selling team tokens.
Why It Matters
Rug pulls are extremely common in DeFi and NFT markets. Recognizing the warning signs — anonymous teams, unaudited contracts, unrealistic promises — can protect your money.
Example
A new DeFi protocol promises 1,000% annual yields. Thousands of users deposit funds. A week later, the developers drain the liquidity pool and disappear with $10 million.
Related Terms
DeFi
NFT
Phishing
Smart Contract