Bald Rug Pulls Days After Its Launch

Am not sure how I didn’t hear about this bald token before it did what it did. If you’re not familiar with the bald coin I don’t think I’d be very much surprised. I did read about it hours before it rug pulled. It was being hyped so much by one of the people who made it in crypto who am I following on Twitter. I do follow his financial advice from time to time. But then this time round I didn’t pay much attention to this new token called bald he kept talking about.

In the early hours of Monday, he was tweeting about the amount of profits he made just from buying bald and promised it might even be the next big thing. Whether he was contacted to say that or not we can’t really tell but then all I know is he said he made huge profits.

What is a rug pull?

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A rug pull is when a crypto project's plug or should I say its liquidity is pulled off and then investors are suddenly left with worthless tokens or investors or holders are left with tokens which are way cheaper than when they purchased them. When this happens it means one thing; you’re fucked.

What makes a rug pull easily happen is that anyone can own a crypto project as long as he can provide liquidity. You know, a creator of a project can remain anonymous and still put his project out there. There are a lot of crypto projects out there and no one knows their creators out there. So a rug pull happens easily because mostly the creators are the ones with most of the coins and the moment they sell those coins in the market it means you the rest of the investors are left with cheap or worthless coins.

Bald launched on coin bases layer two blockchain over the weekend. It gained a lot of hype from investors who are quite influential on Twitter. According to reports bald made people millionaires within 48 hours. It was reported that an investment made 1.4 million dollars with an investment of 500 dollars.

After making some people rich it was rug pulled and made a damp of about 90% to a price of 0.00127508 dollars within 48 hours of its launch.

Now with this information, people would have thought we are looking at another Pepe token story but it appears many people were wrong.

Why doesn’t this happen often on dex?

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Well with Dex exchanges it’s kind of hard for project creators to rug-pull a project. This is because before a coin is listed on decentralised exchange checks are made countless times or should I say the token has to reach a certain level. This doesn’t mean rug pulls don’t happen on dex but then liquidity is provided to the exchanges which they keep to help traders to be able to trade on their exchanges.

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How it works is that a defi project after making its token gives liquidity to the exchange against a certain more stable coin like eth. So after this pair, it is put in a liquidity pool to enable people to trade it. This will allow people to buy and sell.

So why does it easily happen with Defi?

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This easily happens with defi simply because crypto projects are private. We can also say because crypto projects are decentralized the creator of a token can easily remove liquidity from his or her project and will not be accountable for doing it.

So this means anyone can set up an IDO and then immediately rug pull it. So look out for new projects that come out of the blue and quickly skyrocket. Mostly these are the tokens that can easily rug pull. They are easily hyped by Twitter influencers to catch investors like you and me. Stay safe out there and do your background checks before investing.

Sources used

leoglossary

Crypto savings expert

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