How to detect a rug pull
There are several ways to detect a rug pull. Some of which will be mentioned here.
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Four ways to Detect #rugpull
▪When developers are making money
▪The project arose out of nowhere
▪Developers that choose to remain anonymous
▪Liquidity issues
◾️When developers are making money
Although this may not seem to be a fraud in a free market, it qualifies as such if the initiative was developed solely for this goal.
malevolent developer, as in the previous two frauds, builds a project with an exaggerated value proposition.
The project arose out of nowhere 👀
◾️Rug pulls seem to appear out of nowhere, while legitimate cryptocurrencies and DeFi initiatives take years to build.
These phony enterprises are often backed by a lot of hype, leveraging on currently prevalent cultural memes.
Developers that choose to remain anonymous
When the dev refuse to show his / her self
The project meant be #Rugpull
Founder meant be scared not to get catch 🤦🏽♂️
And fake his identity
they may have excellent legal reasons for doing so, and you should probably avoid that coin.
Liquidity issue
You can’t check the liquidity of DeFi projects, but you can always do it with a cryptocurrency. Low liquidity suggests that converting the token to cash is difficult, which might be due to the creator having a limited amount of funding to manufacture the token
