Rug pulls and honeypots
Four distinct mechanisms, often described with one word. They differ in what is done to you, how visible it is beforehand, and whether anything could have caught it.
"Rug pull" gets used for every situation where a token becomes worthless. That flattens four different mechanisms into one word, and the differences matter — they are not equally detectable, and one of them is not a scam at all.
1. Liquidity removal
What happens. Whoever holds the LP tokens withdraws the pool. The real asset leaves, the pool is empty, and there is nothing left to sell into. This takes one transaction and no notice.
What it looks like afterwards. A vertical drop to near zero at a single moment, and a withdrawal visible on the pool address at exactly that timestamp. Unmistakable in hindsight.
Detectable in advance? Partly. If the LP tokens are held rather than burned or locked, the capability is visible before anything happens — see liquidity and locks. Capability is not intent, but here the capability is the whole risk.
2. The honeypot
What happens. The contract allows buying and blocks selling. Your balance is real, the price on screen is real, and every attempt to sell fails. The token was never a market; it was a collection point.
What it looks like afterwards. A chart that only goes up, because nothing else was permitted. Failed sell transactions from many addresses, all reverting.
Detectable in advance? The crude version, yes — scanners simulate a sell and see it fail. The refined versions are harder: contracts that permit small sells and block large ones, that allow selling until a threshold, or that add a fee approaching the whole amount. A simulation tests one small sale and reports on that sale.
"Increase your slippage, it will go through"
Standard advice around a token that will not sell, and it is sometimes an honest description of a volatile pool. It is also exactly what somebody says when the contract is blocking you and each retry costs you another fee. See fees, slippage and MEV.
3. Mint and dump
What happens. The authority to create new tokens was never given up. When enough real value sits in the pool, the holder of that authority issues a large quantity of new supply and sells it. Every existing holder is diluted in one transaction, and the pool is drained through what looks like ordinary trading.
What it looks like afterwards. A supply figure that jumped, and large sells from an address connected to the contract's authority.
Detectable in advance? Yes, and reliably — this is one of the checks that works. Whether the mint authority still exists is a fact you can read. Checking a token contract covers where.
4. The slow rug
What happens. Nothing dramatic. The team sells steadily into the buying while continuing to post, promise and promote. Development stops or was never real. The price bleeds down over weeks rather than falling in one candle.
What it looks like afterwards. A long decline and a chat that went quiet. Often no single transaction anybody could point at.
Detectable in advance? No. There is no contract flag for people losing interest in a project they promised to build, and no scanner has an opinion about it. Watching outflows from large holders is the closest thing, and it tells you it is happening, not that it will.
Two of the four are checkable, two are not
Liquidity state and mint authority are facts on the chain. A refined honeypot and a slow rug are behaviour, and behaviour has no flag. Checks are worth running and they cover half the list.
The fifth ending, which is the most common
Most tokens go to zero without any of this. No trap, no removal, no dilution — attention moves elsewhere, buying stops, holders leave one after another, and the price settles at approximately nothing.
Nobody committed a fraud. The contract was fine, the liquidity was burned, the team was honest. The token was a speculative object whose only support was other people wanting it, and they stopped. This outcome is not covered by any check on any scanner, because there is nothing to detect.
If it has already happened
Assume the money is gone and act accordingly. There is no reversal on a public chain, and no authority that can undo a transaction. The immediate risks are the second-round ones: recovery services that take a fee to do nothing, and fake support accounts that appear the moment you post about a loss.
If your funds are gone sets out what is actually worth doing, in order. Fake support covers the people who will contact you within minutes.
Naming the mechanisms is not a method for winning
Understanding all four still leaves you in a zero-sum market against faster participants who often built the thing. This section exists so the machine is recognisable, not so it can be played.
Sources
Where the factual claims on this page come from. Each was read on the date shown.