Don’t Get Rekt: How to Spot a Rugpull Before It Happens
Memecoins are chaotic, thrilling, and sometimes wildly profitable. But with every $PEPE or $DOGE success story, there are hundreds of rugs waiting to pull the floor from under new investors. If you’re trading in the degen trenches, knowing how to spot a potential rugpull can save your portfolio — and your sanity.
Here’s how to stay one step ahead of the scammers.
1. No Locked Liquidity? Immediate Red Flag.
Liquidity is what allows you to sell a token. If the liquidity isn’t locked, the developer can remove it at any time — instantly draining the pool and leaving you with worthless tokens.
You can check whether liquidity is locked using platforms like:
Pro tip: If there’s no lock, or the lock expires in just a few days — that’s a big no.
2. Is the Contract Renounced?
When a project renounces ownership of the contract, it means the devs can no longer change key functions (like minting more tokens, changing fees, or blacklisting wallets). This makes it harder to rug.
If the contract isn’t renounced, make sure the devs are public and reputable — otherwise, it’s a trust-based gamble.
3. Suspicious Tokenomics = Warning Sign
You’re seeing 10–20% buy/sell taxes? A claim of “redistribution to holders” that doesn’t make sense? That could be a honeypot — where you can buy but can’t sell.
Ask:
Is there a clear reason for high taxes?
Are those taxes going somewhere trackable (like LP, burns, or staking)?
Is the token sellable at all? (Use honeypot checkers to test.)
4. Fake Volume Is a Classic Trap
A memecoin showing $5 million in daily volume with only $50k in liquidity? Something’s off.
Scammers inflate volume with wash trading or bots on obscure DEXs. Real volume has solid liquidity and multiple sources (Uniswap, PancakeSwap, CEXs, etc.). Look at the volume-to-liquidity ratio — if it’s too good to be true, it often is.
5. No Website, No Docs, No Team = No Trust
Yes, memes are supposed to be funny — but a zero-effort project is a rug in disguise.
Even the most ridiculous tokens have:
A basic website
Some kind of whitepaper or roadmap
A known or semi-public dev/team
If the project only has a Telegram and nothing else, run.
6. Top Wallets Hold Too Much? Exit Immediately.
Check the holder distribution on:
If the top 10 wallets hold 30–50% of supply, and they’re funded minutes before launch — that’s insider distribution. Expect a coordinated dump once liquidity spikes.
7. Too Much Hype, Too Fast = Botched Pump and Dump
Watch out for:
Paid influencer campaigns
Trending tools being spammed
“Stealth” launches that are suddenly everywhere
Scam projects often go viral fast to generate FOMO, then pull the rug as liquidity pumps. Don’t confuse noise for real momentum.
Final Thoughts: Trust, But Verify
Every week there’s a new memecoin running 100x. But for every moon mission, there’s a rugpull lurking nearby. Use these red flags as your checklist. If something seems off — don’t ape in just because it’s trending.
DYOR always. Stay sharp, stay safe, and keep hunting alpha.
