> ## Documentation Index
> Fetch the complete documentation index at: https://docs.webacy.com/llms.txt
> Use this file to discover all available pages before exploring further.

# Rug Pulls

> Learn how rug pulls drain liquidity pools to crash token prices, the difference between hard and soft rugs, and how to spot scam projects early.

## Overview

A **rug pull** is a scam where token creators suddenly remove all liquidity from a trading pool, crashing the token's value to near zero and leaving investors with worthless holdings.

<Warning>
  Rug pulls have caused billions in losses across crypto. Always verify liquidity locks and team credibility before investing.
</Warning>

## How Rug Pulls Work

1. **Token Creation**: Scammer creates a new token
2. **Liquidity Addition**: Initial liquidity is added to DEX
3. **Hype Building**: Aggressive marketing attracts buyers
4. **Price Pump**: Buying pressure increases token price
5. **Rug Pull**: Creator removes liquidity, crashing the price
6. **Exit**: Scammer disappears with the funds

## Types of Rug Pulls

### Hard Rug Pull

* Sudden, complete liquidity removal
* Token becomes immediately untradeable
* Most obvious but hardest to recover from

### Soft Rug Pull

* Gradual selling by insiders
* Slow price decline over time
* Harder to identify as a scam

### Liquidity Drain

* Hidden functions allow liquidity removal
* May bypass "locked" liquidity claims
* Often uses complex contract mechanisms

## Detection Indicators

| Tag                  | Severity | Description                             |
| -------------------- | -------- | --------------------------------------- |
| `rug_pull`           | Critical | Token associated with rug pull activity |
| `unlocked_liquidity` | High     | Liquidity is not locked                 |
| `low_liquidity`      | High     | Insufficient liquidity for safe trading |
| `owner_can_drain`    | Critical | Owner has ability to drain funds        |
| `minter-rug_pull`    | Critical | Token minter involved in previous rugs  |

## API Example

```bash theme={null}
curl -X GET "https://api.webacy.com/tokens/0x123...?chain=eth" \
  -H "x-api-key: YOUR_API_KEY"
```

Response indicating rug pull risk:

```json theme={null}
{
  "overallRisk": 95.0,
  "issues": [
    {
      "tag": "unlocked_liquidity",
      "severity": "high",
      "description": "Liquidity is not locked and can be removed at any time"
    },
    {
      "tag": "minter-rug_pull",
      "severity": "critical",
      "description": "Token minter has been involved in previous rug pulls"
    }
  ]
}
```

## Red Flags

* **Unlocked liquidity** - No verified lock on LP tokens
* **Anonymous team** - No public, verifiable identities
* **Unrealistic promises** - Guaranteed returns or moonshot claims
* **Rushed launch** - Little documentation or roadmap
* **Concentrated ownership** - Few wallets hold most supply
* **No audit** - Contract not reviewed by reputable auditors

## Liquidity Analysis

```bash theme={null}
# Check liquidity pools for a token
curl -X GET "https://api.webacy.com/tokens/0x123.../pools?chain=eth" \
  -H "x-api-key: YOUR_API_KEY"
```

Key metrics to check:

* **Total liquidity** - Higher is generally safer
* **Lock status** - Is LP locked? For how long?
* **Lock contract** - Is it a reputable locker?
* **Unlock date** - When can liquidity be removed?

## Protection Strategies

1. **Verify liquidity locks** - Check lock duration and contract
2. **Research the team** - Look for doxxed, verifiable members
3. **Check holder distribution** - Avoid concentrated ownership
4. **Start small** - Never invest more than you can afford to lose
5. **Use Risk DD** - Scan tokens before investing
6. **Monitor for changes** - Set up alerts for liquidity movements

## Related Concepts

* [Honeypots](/glossary/honeypots) - Tokens that prevent selling
* [Liquidity Risks](/glossary/liquidity-risks) - Understanding liquidity dangers
* [Snipers & Bundlers](/glossary/snipers-bundlers) - Launch manipulation