I knew someone who experienced this firsthand. He invested in a token that seemed to have a lot of promise. The team hosted social media livestreams, shared roadmaps, and showcased supposed partnerships with major companies. Everything seemed so legitimate that several friends also invested. In a matter of weeks, the token's price skyrocketed... and just when everyone was most excited, the inevitable happened: the creators sold everything, closed their social media channels, the website disappeared, and the Telegram chats were empty. That's how it all vanished in less than 24 hours. Well, I've been through it myself at some point.

And don't think this only happens to inexperienced people. Even projects that go viral have ended the same way. Take the case of Squid Game Token in 2021, for example. Taking advantage of the popularity of the Netflix series, a group of developers launched a token supposedly inspired by the game. Within a few days, thousands of people bought it, as it was supposed to allow them to participate in a virtual game with million-dollar prizes. The price went from a few cents to more than $2,800 per token. It all seemed like a success... until, suddenly, the price plummeted to zero. The developers pocketed about $3.3 million and erased their entire online presence. ^Source

Another high-profile case was that of AnubisDAO. This Egyptian-themed project, which promised very high returns, managed to raise around $60 million in pre-sales. But it never even officially launched anything. In less than 24 hours, the funds disappeared, and the alleged creators were never heard from again. There were no giant increases or huge prior profits; they simply disappeared with all the money before investors could react. ^Source

The sad thing is that most rug pulls take advantage of FOMO, that anxiety about not being left out of “the next million-dollar opportunity,” which I recently talked about in this post. And that's where I think we should stop for a moment and ask ourselves: am I getting in because I've really done my research and believe in the project, or simply because I don't want to be the only one who didn't invest? Because the difference between a conscious investment and a leap of faith is right there.

_Source

How to avoid falling into a rug pull? There's no magic formula, but there are warning signs we shouldn't ignore. If a project doesn't disclose who the developers or team are, if the promises sound too good to be true, if liquidity isn't locked, if everything depends on hype and not real fundamentals... be careful. It's also good to check if the smart contract is audited and if the transaction volume is genuine and not artificially inflated.

Of course, no one is exempt from risk in this crypto world. Even seemingly solid projects can end badly. But I think if we take the time to investigate, be a little wary, and don't invest more than we're willing to lose, we greatly reduce the chances of it happening to us.

Well, that's my reflection today. I'm interested in knowing if any of you have been through a similar situation or know someone who has fallen into a rug pull. Do you think it's always possible to detect them in time, or that, sooner or later, everyone in the crypto world will encounter one?

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