Explain the Risk of ‘Rug Pull’ in the Context of New, Unaudited Liquidity Pools

A rug pull is a malicious maneuver where the developers of a new cryptocurrency project suddenly drain all the funds from its liquidity pool, often after attracting significant capital. This is typically done by using a backdoor or privileged function in the smart contract.

The risk is highest in unaudited pools or those where the LP tokens are not properly locked or burned, leaving investors with worthless tokens.