How to spot a rug pull
Most rug pulls telegraph themselves in the contract and the market data before the price ever collapses. Here's the pre-buy checklist, and how to read each signal.
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Liquidity: locked, burned, or neither
The liquidity pool (LP) tokens represent a claim on the pooled funds backing a token's price. If the deployer holds those LP tokens freely, they can pull the liquidity at any moment and walk away with it, the classic rug. Locked LP (held by a time-locked contract) or burned LP (sent to a dead address) means it can't be pulled; anything else is a live risk.
Mint and owner powers
A 'fixed supply' means nothing if the owner can still mint new tokens, change tax rates, pause transfers, or reclaim ownership after appearing to renounce it. Check whether the contract is mintable and what powers the owner or a hidden owner still holds, a genuinely safe launch has renounced or heavily restricted these.
Holder concentration and wash volume
If the deployer or top 10 wallets hold a large share of supply, a small number of addresses can dump on every other buyer at once. Separately, compare 24h volume to liquidity: when volume runs many times higher than the pool itself, that 'activity' is often self-traded to fake demand rather than organic buying and selling.
The honeypot gate
None of the above matters if you can't sell. A honeypot lets buys through freely while blocking sells outright or taxing them near 100%, so the chart looks healthy right up until you try to exit. Run every signal in one pass before you buy: the Rug Checker turns a contract address into a 0-100 Launch Safety Score with every deduction shown.
FAQ
Can a token pass every check and still rug?
Yes: locked liquidity, low concentration, and no honeypot flags reduce risk, they don't eliminate it. A team can still manipulate price through other means. Treat a clean score as lower risk, not zero risk, and size positions accordingly.
What's the single biggest red flag?
A honeypot (can't sell) or unlocked liquidity paired with concentrated holders. Either one alone is enough to walk away; together, they describe most rugs before they happen.