What Is the Role of a DEX Liquidity Pool in a Rug Pull?

A DEX liquidity pool holds pairs of tokens, allowing users to trade them without a central authority. In a rug pull, the project developers are often the initial providers of a large portion of the liquidity.

They then remove or "drain" the underlying assets (like ETH or stablecoins) from the pool, leaving investors holding a token with no value because there is nothing left to trade it for. This draining action is the core mechanism of the rug pull.