Rug Pull in Crypto: What It Is and How to Recognize It
Setting the token supply and mint authorities. Adding initial liquidity to pools on Raydium or pump.fun. Opening the trading pair for the token. These steps make meme coins highly accessible but also increase the risk of scams if security checks are ignored. Mint Authority: Controls token minting. Retaining it allows developers to create unlimited tokens. Freeze Authority: Can freeze token transfers, limiting liquidity. Liquidity Control: Developers can add or remove liquidity, affecting token price. If developers have unrestricted authority and can remove liquidity anytime, it presents a high rug pull risk. Liquidity Not Locked: Developers can withdraw funds at any time.
