What is the difference between a rug pull and a honeypot?

A honeypot blocks you from selling by coding the contract to reject sell transactions. A rug pull lets you sell, but the team removes the liquidity pool or dumps their token allocation first, so the price crashes to near zero before you can exit. Both result in total loss, but the mechanism is different.

How do I know if liquidity is locked?

Use a token scanner that checks liquidity lock status. GuavaIntel checks whether the liquidity pool tokens are time-locked via PinkLock, Unicrypt, or similar services. If liquidity is not locked or the lock is expiring soon, the token is at risk of a rug pull.

Can a rug pull happen on Solana?

Yes. On Solana, rug pulls typically happen when the team retains mint authority and creates unlimited supply, or when they remove liquidity from Raydium. Check that mint authority is renounced and that liquidity is burned or locked.

Rug Pull — Definition, Types & How to Avoid

What Is a Rug Pull?

A rug pull is one of the most common crypto scams. The team behind a token builds hype, attracts buyers, and then suddenly removes all liquidity from the DEX pool or dumps their large pre-mined allocation. The price crashes to near zero within minutes. The team disappears, and holders are left with worthless tokens.

The name comes from the phrase "pulling the rug out from under you" — the team removes the foundation (liquidity) that gave the token its value, and everything collapses.

Types of Rug Pulls

1. Liquidity Removal

The most common type. The team holds the liquidity pool (LP) tokens, which represent the funds in the DEX trading pair. At the peak of hype, they withdraw the LP tokens from the pool, removing all the ETH/SOL/USDC that backed the token. Holders can still technically sell, but there is nothing to sell into — the price is effectively zero.

2. Token Dump

The team holds a large allocation (often 20–50% of supply) that was not publicly disclosed or was hidden across multiple wallets. Once enough retail buyers have entered, the team dumps their allocation into the pool, overwhelming buy pressure and crashing the price.

3. Mint Authority Exploit (Solana)

On Solana, if the team retains mint authority, they can create unlimited new tokens at any time and dump them into the Raydium pool. This inflates the supply massively and crashes the price without needing to touch the existing liquidity.

Warning Signs of a Rug Pull

Liquidity not locked: If the team can withdraw LP tokens at any time, a rug pull is trivial.
High team allocation: If a single wallet or group of wallets holds more than 20% of supply, they can dump at any time.
Unrenounced ownership: The team can change contract terms, mint new tokens, or add restrictions.
Mint authority not renounced (Solana): The team can create unlimited supply.
Anonymous team: No verifiable identity, no audit, no track record.
Clone farm pattern: The deployer wallet has launched many tokens before — often a serial scammer.

How to Avoid Rug Pulls

Before buying any token, run a security scan that checks: (1) whether liquidity is locked and for how long, (2) whether ownership is renounced, (3) the concentration of tokens among top holders, and (4) the deployer wallet's history. GuavaIntel's free scanner runs all of these checks automatically across Ethereum, BSC, Base, and Solana.

As a rule of thumb: if liquidity is not locked for at least 30 days, the team holds more than 15% of supply, or the deployer has launched multiple tokens, treat the token as high risk.

Rug Pull