Security Guide

How to Spot a Rug Pull

A rug pull happens when a token creators suddenly drain liquidity, dump their holdings, or abandon the project after collecting investors money. Here are the 8 warning signs every trader must know.

$Billions

Lost Yearly

~45%

Of New Tokens

<30min

Avg Rug Time

All Chains

Affected

The Anatomy

How Rug Pulls Work

The deployer creates a token, adds initial liquidity to a DEX, and promotes it aggressively. As buyers drive the price up, the deployer waits for the pool to grow — then pulls all liquidity in a single transaction, crashing the token to zero.

The entire cycle can happen in under 30 minutes. By the time victims realize what happened, the deployer has already moved funds through mixers and bridges.

Launch

Deploy token + add liquidity

Promote

Hype on social media

Pump

Price rises as buyers FOMO

Rug

Pull liquidity, token = $0

Warning Signs

8 Red Flags

Spot these signals before you buy — not after. Each flag alone is a warning; multiple flags together almost guarantee a scam.

Liquidity
Supply
Contract
Behavior
01

Unlocked Liquidity

When LP tokens are not locked in a time-lock contract, the deployer can remove all liquidity at any moment. This is the single biggest rug pull enabler.

Critical
02

Concentrated Token Supply

If one wallet holds more than 10-20% of total supply, they can crash the price at will. Coinibi flags tokens where the top holder owns a disproportionate share.

Critical
03

Unverified Contract Code

Legitimate projects verify their smart contract code on block explorers. Unverified code means you cannot know what the contract actually does.

High
04

No Liquidity Lock Proof

Some projects claim liquidity is locked but provide no verifiable proof. Genuine locks are on-chain and verifiable through Unicrypt, Team Finance, or PinkSale.

High
05

Suspiciously High Tax

Some tokens launch with low tax but the owner can raise it to 50%+ later. Check for setFee, updateTax, or setMarketingFee functions with no maximum cap.

High
06

Owner Has Not Renounced

When ownership is not renounced, the owner can mint tokens, change taxes, pause transfers, or blacklist addresses. Renouncement removes this power.

Medium
07

Artificial Volume & Hype

Scam projects create fake trading volume through wash trading and flood social media with paid promotions. Massive volume but few unique holders = fabricated.

Medium
08

Copycat Names & Logos

Many rug pulls impersonate popular projects using similar names, logos, or tickers. Always verify the contract address through official sources.

Medium
Protect Yourself

How Coinibi Helps

Coinibi's automated safety scanner checks every new token for these red flags in real time.

Honeypot Simulation

Simulates sell transactions to detect honeypot contracts before you buy

Liquidity Lock Check

Verifies whether LP tokens are locked and for how long

Holder Analysis

Flags tokens where top holders own a disproportionate share of supply

Contract Verification

Checks if the smart contract source code is verified on the block explorer

Related Reading

Stay Safe

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