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What Is a “Rug Pull” in the Context of a Liquidity Pool?

A "rug pull" is a malicious maneuver where the developers of a new token or DeFi protocol suddenly withdraw all the liquidity from the pool. This leaves the investors holding worthless tokens that cannot be traded.

It is a form of exit scam, often facilitated by unaudited smart contracts with "admin keys" that allow for such withdrawals.

What Is a ‘Rug Pull’ and How Is It Executed in a DeFi Protocol?
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What Is “Liquidity” in the Context of a DeFi Rug Pull?