Recently, I saw another new case of rug pull emerging, which reminded me of the most common scam tactics in the crypto market. To be honest, these types of scams have become quite sophisticated, especially with the rapid development of DeFi and Web3 in recent years.

Let's first talk about the core logic of rug pulls. Simply put, project teams carefully design to gain investors' trust, attract everyone to buy tokens, and then suddenly drain liquidity pools or manipulate the market, causing investors' assets to instantly become worthless. Some teams even pretend to cooperate with well-known companies, release false whitepapers, and create hype to make people think this is a real opportunity. When the project team runs away with the funds, investors only realize they've been scammed.

I've noticed that rug pull scams usually have several obvious warning signs. First is that liquidity is not locked — this is the most critical point. Legitimate DeFi projects lock liquidity in smart contracts to ensure the team cannot withdraw at will. But scam projects often bypass this mechanism, allowing the team to withdraw all funds at any time. Second, malicious backdoors may be hidden in the smart contract code, such as prohibiting investors from selling tokens or allowing developers to mint unlimited tokens. Additionally, anonymous teams, exaggerated return promises (like 100x returns, risk-free high yields), and communities flooded with bots, with development teams never responding to questions, are all typical features of rug pulls.

Looking at real cases over the years shows how terrifying this can be. OneCoin, a Ponzi scheme, scammed $4 billion, with founder Ruja Ignatova claiming it would become the "Bitcoin killer," but this so-called cryptocurrency had no blockchain at all, only a fictional product based on SQL servers. Thodex was a Turkish exchange that suddenly disappeared in 2021, causing investors to lose over $2 billion. Its founder, Faruk Fatih Özer, was later arrested in Albania. Then there’s AnubisDAO, which raised $60 million worth of ETH from investors in less than 24 hours, then transferred the funds directly to another address, causing the token price to drop to zero. The Squid Game token, riding on the popularity of Netflix’s series of the same name, scammed investors out of $3.3 million, and the developers then drained the liquidity pool.

To avoid becoming a victim, I believe it’s crucial to establish a multi-layered risk assessment strategy. First, thoroughly research the project background, check the team members’ past experience and real identities. Legitimate projects usually have clear whitepapers and detailed technical plans, while scam projects are full of vague descriptions. Second, use blockchain explorers to check smart contract activity, see if large holders are concentrated, look for abnormal transactions, or records of the team suddenly withdrawing large amounts of funds. Third, diversify investments — don’t put all your chips into a single high-risk token, as this can effectively reduce losses from rug pulls.

Finally, I want to emphasize not to be fooled by hype on social media. Many rug pull projects use Twitter, Telegram, and Discord to create FOMO, encouraging you to buy heavily in a short period. If a project’s promotion is overly aggressive but lacks real technical support, you should be more cautious. As we move into 2026, with DeFi, GameFi, and Web3 continuing to expand, new scam methods will only become more covert. Stay rational, carefully evaluate every investment opportunity, and only then can you truly achieve capital growth and avoid becoming the next rug pull victim.