The DeFi landscape is increasingly vulnerable to rug pull, the crypto scam that is evolving in sophistication and considerable problems.
Let’s see in this article how these strategies develop, attract unaware investors, and how the blockchain community is reacting to protect the market.
Summary
Increase in rug pulls in DeFi: how scammers are refining their tactics in the crypto landscape
In recent years, decentralized finance (DeFi) has been a fertile ground for innovation and growth, but also for an increase in scams.
Among these, rug pulls, that is the sudden withdrawal of liquidity from a project by its creators, are taking on increasingly sophisticated forms.
These events not only undermine investors’ confidence, but raise crucial questions about security and transparency in the bull and bear crypto market.
In November, the rug pull reached a peak with 31 incidents reported in a single day, accumulating losses of 15 million dollars in one month.
Although many of these scams have involved amounts less than 100,000 dollars, their increasing volume and complexity are transforming the cryptocurrency landscape.
Allen Zhang, co-founder of the Web3 security company GoPlus, emphasizes that the most common type of scam is the “token honeypot.”
These tokens, often created to attract unsuspecting investors, are difficult to identify due to advanced manipulation techniques, such as the use of multiple wallets to simulate an authentic distribution of funds.
The modern rug pull deviates from the image of a simple and improvised scam. Michael Heinrich, co-founder of 0G Labs, highlights how scammers have adopted sophisticated marketing strategies to attract investors.
Often these scams mimic legitimate startups, using compelling narratives and promotional campaigns to build credibility.
A recent case was that of the memecoin Peanut (PNUT), which saw its value grow by 161 times in just seven days. This attracted the attention of scammers who created fraudulent versions of the token, stealing over 103,000 dollars.
Furthermore, the use of front-running bots has become a common tactic. These bots monitor transactions to identify manipulation opportunities, such as artificially inflating prices to attract additional investors before withdrawing the funds.
The response of the blockchain community
With the increase in the sophistication of scams, the blockchain community has started to develop tools to counter them.
Anaxi Labs, in collaboration with Carnegie Mellon University, has introduced algorithms to improve blockchain transparency. Among these, Jolt stands out, a product designed to simplify contract development and reduce vulnerability risks.
GoPlus has launched the SafeToken protocol, which offers standardized security models to prevent rug pulls based on malicious code. These tools, along with increased user education, are creating a safer environment for the launch of new tokens.
Steven Walbroehl of Halborn also emphasizes the importance of simulations and automated checks in cryptocurrency wallets. These tools could detect suspicious code before users interact with potentially dangerous contracts.
Beyond the technical aspects, rug pulls exploit the psychological vulnerabilities of investors. The fear of missing out (FOMO) and the allure of quick profits make many traders susceptible to scams.
Ben Caselin, cryptocurrency expert, notes that scammers often use extremely professional fronts to gain the trust of investors.
False sponsorships on social media, invented success stories, and well-orchestrated marketing campaigns are common tools to manipulate victims.
Warning signals and prevention strategies
There are signals that can help investors recognize potential rug pull. One of the most evident is the “symbolic concentration,” that is, the presence of a significant percentage of tokens in a few wallets.
Projects with low liquidity or limited distribution are particularly vulnerable to manipulations.
Tools like Etherscan and Token Sniffer can help users identify suspicious activities, but greater general awareness is essential.
As Kate Shen of Anaxi Labs points out, the combination of advanced technology, investor education, and collective responsibility is the key to reducing risks.
