It means when the owner of a project takes away the liquidity used to trade the token. Rendering the token untradable and therefore basically useless.
A term most often used in De-Fi trading. It requires you to take away the liquidity meaning it basically only happens in De-Fi trading. It is a tactic to scam.
You can prevent this from happening to you by buying a token whose liquidity has been locked (though this is often locked for a set period of time, and therefore can still be unlocked after) or has been burned (meaning the liquidity has been permantly locked away).
Although this does not prevent a scammer from scamming, so if they can’t scam by pulling the rug, they may resort to other tactics.
The term is often generalized for scamming in general.
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