Top 10 Red Flags: How to the Rug Pull Scam!
Rug pulls are one of the most common scams in the crypto world, especially in the memecoin space. Here are the top 10 red flags to watch out for before investing in a low market cap (MC) token.
1. Anonymous Developers
If the team behind the project is anonymous or refuses to share their identities, it’s a major red flag. Scammers often hide behind fake profiles to avoid accountability.
2. No Locked Liquidity
Liquidity should be locked for a significant period (e.g., 6–12 months). If the liquidity pool (LP) isn’t locked, the devs can withdraw funds instantly, leaving you with worthless tokens.
3. Suspicious Wallet Clusters
Use tools like Bubblemaps to check if a few wallets hold a large percentage of the supply. Identical wallet percentages (e.g., 1.33% each) often indicate a bundle scam.
4. High Sell Taxes
Some contracts include hidden sell taxes (e.g., 10–30%). This traps holders, as selling becomes unprofitable. Always check the contract with tools like RugCheck.
5. Fake Volume
If the trading volume is artificially inflated by bots, the coin will drop as soon as the bots stop. Use DexScreener to analyze volume trends.
6. No Community Engagement
A dead Telegram/Discord group or lack of social media activity is a bad sign. Legit projects have active, engaged communities.
7. Pre-Sales (Bundles)
If a large portion of the supply is sold pre-launch, it’s likely a scam. Pre-sale buyers often dump their tokens immediately after launch.
8. Copy-Paste Contracts
Scammers often reuse contracts from previous scams. Use Honeypot.is to check if the contract has been flagged.
9. Unrealistic Promises
If a project promises guaranteed returns or “100x moonshots,” it’s almost always a scam. Crypto investments are inherently risky.
10. No Roadmap or Utility
Memecoins with no clear roadmap, use case, or long-term vision are often pump-and-dump schemes. Avoid tokens that rely solely on hype.
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