How Can Investors Detect a Potential ‘Soft Rug’ Pull versus a ‘Hard Rug’ Pull?

A 'hard rug' pull is easily detectable as it involves a malicious function in the smart contract allowing developers to instantly drain the liquidity pool. A 'soft rug' is harder to spot; developers slowly sell off their large holdings over time, or abandon the project, letting the price gradually decline.

Investors should look for smart contract audits and check the token distribution for large developer wallets.