A rug pull is when the people behind a coin take buyers' money and walk away, leaving the price close to zero. The name comes from having the rug pulled from under your feet. On Solana it rarely looks like one dramatic event any more. Most rugs today are insiders quietly selling a large stash of tokens into the people buying.
Why rug pulls are so common with memecoins
Launching a token on Solana takes a few minutes and costs very little. There is no company, no audit and nobody checking who the creator is. A token is just an entry on the blockchain with a name, a ticker and a supply. Anyone can copy a popular name, write a story around it and start selling.
That low cost cuts both ways. It is why there are thousands of new coins every day, and it is why a large share of them are built to extract money rather than to last. If you are new to how these coins work, start with what a memecoin is and how pump.fun launches work.
The main types of rug pull
1. Liquidity pull
This is the classic rug. To trade a coin, someone has to put money into a liquidity pool: a pot holding the coin on one side and SOL or a stablecoin on the other. Whoever adds that liquidity gets LP tokens (a receipt for their share of the pool). If they keep those LP tokens, they can withdraw the pool at any time, taking the SOL side with them. Everyone else is left holding a coin with nothing to sell into.
What it looks like on-chain: liquidity drops to almost nothing in a single transaction and the chart goes vertical downwards.
Main warning sign: liquidity that is not locked or burned. See liquidity locks and burns.
2. Insider dump
The creator and their friends, or wallets they control, buy a big share of supply at launch for almost nothing. Once real buyers push the price up, they sell. Because they own so much of the supply, their selling wipes out the price even though the liquidity itself was never touched.
This is now the most common kind of rug on Solana, partly because pump.fun burns the LP tokens for a coin's pool when it graduates. With the pool locked, dumping tokens is the easy way out.
Main warning signs: a few wallets holding a large share of supply, same-size bags across many wallets, and wallets funded from the same source. See bundled launches and insider wallets.
3. Mint rug
If the creator keeps the mint authority (the permission to create new tokens), they can print millions more at any time and sell them. Every holder gets diluted and the price collapses.
Main warning sign: mint authority still enabled. See mint and freeze authority.
4. Freeze trap (a "honeypot")
A honeypot is a coin you can buy but cannot sell. On Solana the usual tool is the freeze authority, which lets its holder freeze any wallet's tokens so they cannot be moved. Buyers see the price going up, buy in, then find their tokens stuck while the creator sells.
Newer Solana tokens can also use extensions from the Token-2022 program, such as a permanent delegate (an address that can move tokens out of any wallet) or a pause switch. These are rarer but work in a similar way.
Main warning sign: freeze authority enabled, or unusual token extensions on the RugCheck report.
5. Soft rug
Nothing dramatic happens. The team stops posting, the website goes offline and the developer sells their holdings in small pieces over days or weeks. The price bleeds out rather than crashing. Soft rugs are the hardest type to catch with automated checks, because every individual sale looks normal. We cover this in detail in can a coin that passes every check still rug.
6. Serial launcher
Some wallets launch coin after coin, each one following the same pattern. RugCheck tracks whether a creator wallet has launched tokens that later rugged. A creator with that history is a strong warning even if the new coin looks clean.
The warning signs at a glance
| Rug type | What to look for | How fast it happens |
|---|---|---|
| Liquidity pull | LP not locked or burned | Seconds |
| Insider dump | Large holders, identical bags, linked wallets | Minutes to hours |
| Mint rug | Mint authority enabled | Any time |
| Freeze trap | Freeze authority enabled | Any time |
| Soft rug | Dev still holding, team going quiet | Days to weeks |
| Serial launcher | Creator wallet with rugged tokens | Repeats |
Key point: Most rugs need one of three things: control of the liquidity, control of the token itself, or control of a big share of the supply. Checks look for each of those.
How we check for these signs
Before It Rugs pulls the token report from RugCheck and market data from DexScreener for the new Solana coins we pick up. Each warning sign adds points, and the total becomes a grade from A to F. RugCheck marking a coin as rugged scores 9 points on its own, which is an automatic F. Mint or freeze authority scores 4 each. Bundles, insiders and big holders score 1 to 3. You can see the full table in what our grades mean.
We also keep a public record of what happens next: every coin we grade E or F, and how its price moves afterwards, is listed on the live board.
What a check cannot tell you
A clean report means the obvious tools for a rug are not there. It does not mean nobody can sell. Insiders can spread a stash across fresh wallets that no tool links together. A team can sell slowly. Hype can simply run out. Read can a coin that passes every check still rug before trusting any grade, ours included.
Simple habits that help
- Check the contract address, not just the name. Copycat tokens are everywhere. See copycat tokens.
- Look at who holds the supply before you look at the chart.
- Never put in more than you can afford to lose completely.
- Plan how you would get out before you get in. Our guide to stop losses on Jupiter covers one way to do that.
Related
- What is a bundled launch, and how to spot one
- Mint authority and freeze authority explained
- Can a coin that passes every check still rug?
- What our A to F grades mean