How Does the Term ‘Rug Pull’ Relate to Centralized Control in Early-Stage Projects?

A 'rug pull' is a malicious maneuver where a project's developers suddenly drain all the funds from a liquidity pool or treasury and abandon the project. This is only possible when the developers maintain centralized control, typically through a privileged 'owner' key on the smart contract that allows them to withdraw funds or alter contract logic.

The absence of proper time-locks, multi-sigs, or immutable contracts is a hallmark of a project vulnerable to a rug pull, highlighting the danger of excessive centralization.