Anatomy of a Rugpull: Step-by-Step Breakdown

Introduction

Rug pulls aren’t just some headline-grabbing crypto drama they're one of the most devastating types of scams in DeFi. And while everyone knows they’re bad, most don’t understand just how carefully they’re orchestrated.

This breakdown shows you how they really work. It’s not one sudden move it’s a layered con that builds trust, manipulates hype, and then vanishes with your funds. By the time you realize what happened, it’s already too late.

But it doesn’t have to be.

Phase 1: The Setup

A rugpull always starts with the illusion of a real project.

The scammers create a token. They deploy a smart contract. And they make sure everything looks legit: decent branding, a simple website, maybe even a whitepaper that throws around a few buzzwords like "Web3" or "decentralized utility."

But inside the code? That’s where the trap begins. Sometimes it’s a honeypot you can buy but you can’t sell. Other times, it’s infinite minting, where the dev can create unlimited tokens to dump on you. Sell limits, hidden backdoors, fake audits they’re all fair game.

Then they seed a little liquidity into a DEX like Uniswap or PancakeSwap. Maybe they even lock it for a short time, just long enough to look safe on the surface.

Phase 2: Hype & Herd Mentality

Now it’s time to lure the crowd.

The team or more often, bots and paid influencers start shouting. Giveaways on Telegram. Threads on Reddit. Fake testimonials. "100x potential" promises. The community fills up with "WAGMI" and moon emojis.

The FOMO builds fast. Volume picks up. Wallets start buying in just because other wallets are buying in. The token pumps.

It’s all engineered. Wash trading fakes the volume. Airdrops to influencer wallets fake legitimacy. And if someone tries to question anything in the chat? Silence or ban.

Phase 3: The Exit

Once there's enough money in the pool, the scam ends. Fast.

The devs remove liquidity. Or they trigger that hidden mint function and dump tokens. Or they block all sells. Whatever the trick, the result is the same: price hits zero. The Discord vanishes. Twitter goes dark. The website redirects to nothing.

And you’re stuck holding a worthless token you can’t sell.

Hard vs Soft Rugpulls

Not all rugpulls look the same.

Hard pulls are fast and brutal. They were always meant to steal your money. These use malicious code to block selling or drain funds.

Soft pulls are slower. The devs may actually build for a while but the plan is still to abandon the project or dump insider tokens. It’s not always illegal. But it’s still a betrayal.

You need to watch for both.

Red Flags That Show Up Before the Rug

Anonymous team with no history
No locked liquidity, or only partial locks
Unverified contract on Etherscan
Smart contract has mint functions still active
Token has low holder count but high volume
Chat deletes criticism or hard questions
Promises of "guaranteed returns" or "risk-free 5% per day"
No real audit, or fake audit badge from unknown firm

Most of these can be spotted before you invest. But you have to look.

Real Examples That Hurt Real People

SQUID Token – Blocked selling, drained liquidity. $3 million gone.
AnubisDAO – Raised $60 million, vanished in under 24 hours.
Evolved Apes – Fake NFT project, $2.7 million disappeared.
Frosties NFT – Shut down after mint, but devs were caught and charged.

Pop culture references, play-to-earn hype, and viral memes were the common bait. These weren’t sophisticated projects. Just scams hiding behind buzz.

What You Can Do to Protect Yourself

Always check if liquidity is locked (and for how long)
Use tokenchecker.io to scan contracts before you buy
Look for active mint or blacklist functions in the contract
Review token distribution if 80% is held by one wallet, that’s a problem
Join the project’s chat and ask hard questions see how they respond
Test sell with a small amount before buying in large

tokenchecker.io simulates trades, analyzes contract logic, and highlights red flags instantly. It’s what most people wish they had before they got rugged.

Final Thoughts

Rugpulls are a feature not a bug of the current DeFi landscape. Scammers know the game. They write the rules. But once you understand the anatomy, you can stop playing along.

The next time a project looks too good to be true, slow down. Read the contract. Scan the wallets. Ask who controls the mint key. If you’re not sure, don’t touch it.

tokenchecker.io gives you everything you need to detect traps early. Before the hype. Before the crash.

Stay skeptical. Stay safe.