What a rug-pull is
A rug-pull is when the team behind a crypto token deliberately drains the liquidity pool, sells their pre-mined supply, or rewrites the contract to block sells. Buyers can't get out. The chart goes vertical (pump) and then to zero (dump). The 'team' disappears with the funds. Telegram and Discord channels go silent. Domain expires.
Estimates put rug-pull losses at $2-3 billion globally per year, mostly on Ethereum, BNB Chain, Solana, and Base. Most rug-pulls happen within the first 90 days of a token's launch.
The five tells before launch
- Anonymous team. No real names, no LinkedIn profiles, no prior project history. 'Doxxed' should mean their identity is verified by a known third party, not just a profile photo.
- Unlocked liquidity. The team can pull the liquidity at any time. Real projects lock liquidity for 6-12 months minimum, on a public locker like Unicrypt or Team.Finance, with the lock proof shared in their docs.
- Massive pre-mined team allocation. Team holds 20%+ of supply with no vesting cliff. They can dump on holders the day it launches.
- Suspicious contract code. Mint function the team can call (infinite supply), blocklist function (can stop specific wallets selling), high transfer fees that go to a team wallet. Honest tokens have none of these.
- Pump-and-dump marketing. Influencer shilling on X with #100x and #moonshot, paid Telegram channel pumps, copy-pasted YouTube reviews. Real projects don't market like this.
The chart pattern after launch
Most rug-pulls show the same chart shape:
- Hour 0-12: thin trading, slow climb as early shillers buy in.
- Hour 12-72: parabolic rise, often 10x to 100x. Telegram celebration. Influencer videos.
- Hour 72-168: small dips bought up by the team to maintain the illusion.
- Sudden moment: chart goes vertical down. Liquidity is gone. Sell transactions revert. Telegram admins delete messages and ban critics.
- Aftermath: the token sits at near-zero with thousands of bag-holders. The team wallet has rotated funds through a mixer or bridge to a new chain.
Where AVA fits
For any token contract you can paste in, AVA combines multiple independent signals about the contract code, the deployer, the token economics, and the holder distribution to produce a 0-to-100 trust score with explainable reasoning. See the public how-it-works summary for our methodology overview.
What to do
Before buying any new token: paste the contract address into AVA. If AVA flags it as high risk, walk away. The 100x you might miss is worth less than the 10 0x's you'll avoid.
If you already hold a token that's looking suspect: check the liquidity lock expiry, the holder distribution, and the team's recent X activity. If anything's off, sell what you can while you still can.