Memecoins are fun, wild, and sometimes life-changing. But let’s be real: most new tokens are scams waiting to drain your wallet. The number one trap? Rug pulls.
A rug pull is when devs launch a coin, hype it up, pump the price — and then drain the liquidity or disable selling so holders get rekt. It happens daily on DEXs like Uniswap, PancakeSwap, and Solana’s Jupiter.
The good news? There are red flags you can check before you ape. Let’s break it down.
What’s a Rug Pull?
A rug pull = the devs pull the rug under your feet. They:
Drain liquidity from the pool so you can’t sell
Mint unlimited tokens to dump on buyers
Add “honeypot” code that lets you buy but not sell
Disappear after hyping the coin, leaving bags worthless
Example: In 2021, Squid Game Token (SQUID) pumped 75,000% in a week. Then devs rugged, draining $3M. Buyers couldn’t sell at all.
Red Flags to Watch
No Liquidity Lock
On DEXs, devs must lock liquidity in smart contracts (Unicrypt, Team Finance).
If liquidity isn’t locked → devs can pull it instantly.
No Team Transparency
Anonymous devs are common in memes. But if there’s zero social presence or fake Twitter followers, be cautious.
Honeypot Contracts
Some tokens let you buy but not sell. Use tools like honeypot.is to test.
Weird Tokenomics
Huge tax (like 20–50%) on buys/sells? 🚩
Infinite supply with no burn? 🚩
No Community
Real memes (DOGE, SHIB, PEPE) had organic communities.
Fake ones spam fake followers and Telegram bots.
No Audit / Fake Audit
Many rugs claim “audited,” but reports are fake or low-quality. Always check on the actual auditor’s site.
Tools to DYOR (Do Your Own Research)
DEXTools / Dexscreener → Check charts, liquidity, holders.
TokenSniffer → Scan contracts for common scam code.
Honeypot.is → Test if a token lets you sell.
Etherscan / BscScan → Look at top holders. If one wallet holds 50%+, that’s sus.
Real-World Examples
Squid Game Token → $3M rug, buyers couldn’t sell.
AnubisDAO → $60M gone overnight in 2021.
Hundreds of Solana rugs → In 2023 alone, scams stole over $100M across memecoins.
Pro Tips Before You Ape
Only risk money you can lose.
Check if liquidity is locked.
Avoid projects with crazy high taxes.
Watch the community vibe — is it real, or just bots?
Always test with a small buy before going heavy.
Final Word
Memecoins = fun + chaos. But rugs are everywhere.
CEX-listed memes like DOGE or SHIB are safer, but the x100 pumps happen on DEXs — and that’s where rugs live too.
So if you’re hunting the next PEPE, learn to spot rugs fast. Check contracts, scan liquidity, and don’t let FOMO blind you.
Play smart, and maybe you’ll be the 1 in 10 who makes it out with gains instead of rekt bags.
Wagmi 🚀
