How rug pulls actually work, mechanically
Liquidity pulls, mint-function exploits, and honeypot contracts: the three most common ways a meme coin goes to zero on purpose.
Most people who lose money to a rug pull describe it the same way afterward: the price was climbing, then within minutes it collapsed to nothing and the team disappeared. What actually happened on-chain usually falls into one of three patterns.
The first and most common is a liquidity pull. When a token launches on a decentralized exchange, the developers deposit both the new token and a paired asset (often ETH or SOL) into a liquidity pool, which is what lets anyone buy and sell. If the developers never lock or burn their liquidity-pool tokens, they can withdraw that paired asset at any moment, draining the pool and leaving holders with a token that can no longer be sold for anything of value. This is the mechanism behind most classic 'rug pulls' and it's usually visible after the fact as a single large withdrawal transaction from the pool contract.
The second is a mint-function exploit. Some token contracts retain a hidden or under-disclosed function that lets the deployer mint additional tokens at will. Right before or during a price run-up, the deployer mints a large supply and sells it into the market, crashing the price while extracting real value from buyers.
The third is the honeypot contract. Here, the token's smart contract is written so that only the deployer's wallet (or an allow-listed set of wallets) can actually sell. Everyone else's sell transactions silently fail or lose most of their value to a disguised tax. Buyers see the price rising and assume they can exit; in practice they never could.
Why this matters for your case: which mechanism was used usually determines what evidence is most useful. A liquidity pull case leans heavily on the pool-withdrawal transaction hash. A mint exploit case leans on the token contract's mint history. A honeypot case leans on failed sell transactions from multiple victims' wallets, which is exactly the kind of pattern that's stronger when documented collectively rather than by one victim alone.
Lost money to a rug pull?
Put your case on record with other affected claimants.
Recoup documents your loss and evidence and organizes victims of the same project into one case. We are not a law firm, and recovery is never guaranteed.
