What is a Rug Pull ? Don’t Get Caught With Your Pants Down! — Rug Pull Explained
How To Identify Rug Pulls
Rug Pulls. Examples and avoidances within the DeFi and Crypto Space.
The Cryptocurrency space is a metropolis of technology and disruptive tech that can be life changing. However, this can lead to features of vulnerability and malicious behavior. Normally here at the TCL channel, we like to teach you how to bank coin. Today, we’re going to teach you how to avoid losing your coin to SCAMS!
The wild wild west as some would call it, anything goes. No regulators to help you retract your accidental send to a false wallet or prevent the hacker that just stole all your funds in the project you were excited to add liquidity to.
This space can be as dangerous as it is lucrative but we have specific ways to tell if you are indeed involved in a rugpull or scam.
In this space you have opportunities for such massive gains. For example on BSC Binance Smart Chain, there are yield farming pools with over 1,000% APY, and yes, some people are winning! Some have more than doubled their initial investment or withdrew their initial investment and kept doubling or even tripling their investments in only 30 days! They are aware of the risks. Take Honeyswap.fi’s case for example. In 24 hours 3.3 million dollars worth of USD was pulled or stolen from the protocol. HoneySwaps.fi’s website is no longer available. Ironically, they’re still listed on oracle sites!
Most of these sites all use a similar code. Almost anyone can get a protocol’s GitHub open source script and copy/paste…all while adding your own little touch to it-a back door.
Another most notable example and was shown for the world to see. The “Cuban Missile Crisis” Mark Cuban’s experience with Titan.fi. Which created their own stable coin for their economy called Iron, which was “85% backed by USDC and 15% backed by their own TITAN token which had a varying price. There are certain mechanics of how titan tokens get produced and through their protocol it requires you to add liquidity.
Mark Cuban joined the liquidity pool, the price of titan went up. At some point, something caused the price of titan to go start crashing. The initial backing of the stable coin was not present during this crash and eventually lead to the “Cuban Missile Crisis” aka the rug of Titan. So, users were essentially the collateral that was left and in just stable coins. Stuck. Locked in an empty pool. Was it a hack? Perhaps the team did it as a ploy? Did a member of their team go rogue? The project nearly had $2 billion dollars in locked liquidity and you bet damn sure that was from Mark Cuban’s influence. Unfortunately, this happens in crypto ALL the time. He did claim that “he got out”. Did he actually pull out of the liquidity pool he was providing for or was he even part of the cause? Is that coincidence? luck? These are the speculations you have to take into consideration when things like this happen and it happens more often than you think. He learned that day. Good for Cuban. Kim Kardashian is also among paid shills for shite projects like ETH MAX or other names I don’t even care to look up. PAID SHILLS with MILLIONS of followers. It’s truly a cringe moment. Is it only a matter of time until these sheep realize what they’re slowly discovering?
Commonly big projects or Protocols go through audits to make sure their protocols are strong enough to withstand attacks. Oftentimes that still does not give it 100% certification. However, it does help tremendously. Seeing names audited by reputable names like Certik and Quantstamp, gives you a more integral feeling. A lot depends on integrity in this space. History of performance from these auditors are important as well.
Remember, anyone who messages you on Telegram or in general is most likely a scam. Be extremely aware of what you’re investing in and always DYOR!
We will always be diligent in keeping you safe here with The Crypto Lifestyle team but you must always be wary!
Until next time!
