Rug Pull

De CoinGecko| Actualizat la Aug 12, 2021
In the English lexicon, to pull the rug out (from under someone) means to to suddenly take away important support (from someone). In the context of crypto and Decentralized Finance (DeFi), having been rug pulled means to have liquidity removed from a Decentralized Exchange (DEX) liquidity pool. This results in a sell death spiral as other liquidity provider, holder and traders panic at the loss of available liquidity for trading. Once liquidity has been drained, token holders are usually left with illiquid assets which may not be tradeable anywhere else. It is worth noting that many projects have taken measures to alleviate rug pulling risks by committing certain level of liquidity in a way that can't be removed (ie, LP Token Burn, Liquidity Locking contract..etc). However, it does not fully eliminate rug pulling risks and market participants should conduct due diligence prior to trading.

Împărtășiți cu un prieten!

Termeni asociați

When Moon
An expression used by investors to ask when the price of a coin would hit a peak
Derivatives Market
A market for derivatives which are instruments such as futures or options whose value is derived from an underlying asset.
Cryptocurrency Act of 2020
The Cryptocurrency Act of 2020 is a bill which aims to clarify which federal agencies would regulate which type of crypto assets.
Liquidity
How easily a cryptocurrency can be bought and sold without impacting the overall market price.
Doriți să aflați mai multe?
Înapoi la Glosar sau Abonați-vă la newsletterul nostru.
coingecko (thumbnail mini)
CoinGecko pentru iOS
coingecko (thumbnail mini)
CoinGecko pentru Android