'Slow Rug Pulls: The Wild Nature of Cryptocurrency Projects' by CryptoAdventure defirugpulls nft
and cryptocurrency industry has witnessed its fair share of scammers, seeing that over $2B was lost from rug pull events in 2021, according to data tracker Chainalysis. Out of all crypto scams that took place that year that totaled $7.7B, rug pulls accounted for almost 40%. The scamming event takes place when a virtual asset developer manipulates a token's worth, making it look more lucrative than it is. After that, the developer abandons the project, taking investor funds with them.
Generally, rug pull projects are those crypto projects whose developers have put little effort into them. They are operated by people whose primary goal is to defraud investors of their money. They could accomplish their plans within days or months, depending on how well planned the scam architecture is manufactured. Additionally, the assets within these projects may look slightly similar to other cryptocurrencies within the market.
At the time of the choosing, the malicious developer will pull the ETH from the liquidity pool, leaving just the worthless token instead. Investors cannot trade back their now-worthless tokens while the developer takes his money in legit ETH and makes a run for it.The result of this scam is almost the same as liquidity stealing, but the process is different. In this scam, the developer adds a bit of code that will make investors unable to sell their coins back to the exchange.