A rug pull is a type of cryptocurrency scam where developers abandon a project and run away with investor funds, typically by draining liquidity or selling their token holdings.
Types of rug pulls: Liquidity theft (removing LP tokens), Selling pressure (developers dump tokens), Limiting sell orders (buyers cannot sell), and Backdoor exploits in smart contracts.
Warning signs include anonymous team, unaudited contracts, locked liquidity concerns, unrealistic promises, concentrated token holdings, and aggressive marketing without substance.
Protection strategies: Research the team, verify contract audits, check liquidity lock duration, start with small amounts, and use tools like Token Sniffer for analysis.