What is a rug pull?

A rug pull is what happens when the creators of a crypto project drain its funds or abandon it suddenly, leaving investors with worthless tokens. It matters because rug pulls are one of the most common ways people lose money in crypto, especially with new tokens that have no track record. The classic setup: a team launches a token, pairs it with a real asset like ETH in a liquidity pool, hypes it on social media, then removes that liquidity once enough buyers pile in, crashing the price to near zero within minutes. The Squid Game token did this in 2021, dropping over 99% in seconds after developers cashed out. Watch for locked liquidity, anonymous teams, and audits as basic checks before investing.