Rug Pull Explained: Understanding Solana Rug Pulls and How to Avoid Them
Token Creation: Developers mint a new token with a fixed supply and assign authorities for minting or freezing tokens. Adding Liquidity: Liquidity is provided on decentralized exchanges (DEXs) like Raydium to enable trading. Launching the Token: Once liquidity is added, the token becomes available for traders to buy and sell. Platforms like pumpdump.cc offer tools for creating and launching Solana meme coins quickly, often with minimal technical knowledge. Liquidity Removal: Creators suddenly withdraw liquidity pools, causing token prices to crash. Token Authority Risks: Developers retain control over minting or freezing tokens, allowing them to inflate supply or block transactions.
