6 Reasons Why Rug Pulls Are Becoming More Devastating

Why Rug Pulls Are Becoming More Devastating

As the crypto landscape evolves, so do the tactics of fraudsters, with a recent DappRadar report revealing that while the frequency of rug pulls has decreased in 2025, their impact has grown considerably. Analyst Sara Gherghelas highlights that nearly $6 billion has been lost to these schemes this year, despite a significant drop in the number of incidents compared to 2024.

Background and Context

The recent report by DappRadar highlights a concerning trend in the crypto landscape: while the number of crypto rug pulls has decreased, their impact has intensified. Understanding why rug pulls are becoming more devastating is critical for investors and industry stakeholders. Historically, rug pulls have plagued the cryptocurrency market since its inception, with notorious cases sparking outrage and distrust among investors. For instance, the infamous BitConnect collapse in 2018 left thousands without recourse, pointing to the vulnerabilities that exist in digital finance.

Recent events in 2024, where rug pulls predominantly originated from DeFi protocols and NFTs, illustrate the evolution of these schemes. The shift toward memecoins in 2025, with high-profile cases like the Libertad project’s Solana token crash, shows that the allure of quick profits often masks significant risks. Notably, nearly $6 billion has been lost to rug pulls this year, demonstrating the devastating scale of these incidents. DappRadar analyst Sara Gherghelas emphasizes that despite a decline in frequency, the magnitude of losses underscores an urgent need for robust user awareness and protective measures in this rapidly evolving market.

Crypto Rug Pulls: Slowing Down but Growing More Devastating

The frequency of crypto rug pulls has significantly decreased, yet why rug pulls are becoming more devastating is evident in alarming recent statistics. As reported by DappRadar, there has been a 66% year-on-year drop in the number of rug pulls in 2025 compared to 2024, with only seven incidents recorded thus far this year. However, the total financial losses attributed to these events have surged, with the Web3 ecosystem losing nearly $6 billion due to rug pulls in 2025 alone.

Shifting Trends in Rug Pulls

While early 2024 primarily saw rug pulls linked to DeFi protocols and NFT projects, 2025 has shifted the focus towards memecoins. The recent collapse of the Libertad project’s native Solana token, Libra (LIBRA), illustrates this trend. After peaking at a market capitalization of $4.56 billion, the token plummeted by over 94%, raising concerns of a pump-and-dump scheme. DappRadar analyst Sara Gherghelas noted, “This shift suggests that rug pulls are becoming less frequent, but far more devastating when they do occur.””>

Understanding the Risks

The risks associated with rug pulls remain, even as awareness grows. Gherghelas identifies red flags for potential rug pulls, including:

• A sudden surge in unique active wallets without clear justification
• High trading volumes coupled with low user engagement
• Anonymous developers and unverified smart contracts

“Despite the advancement of detection tools, rug pulls persist as a challenge, especially within rapidly evolving sectors like DeFi,” Gherghelas added. As user knowledge improves, understanding why rug pulls are becoming more devastating is crucial for mitigating their impacts and protecting investments amid a turbulent crypto landscape.

Understanding the Evolution of Crypto Rug Pulls

The latest report from DappRadar highlights a significant shift in the landscape of crypto rug pulls in 2025. While the overall number of incidents has decreased by 66% compared to 2024, the average size of each rug pull has dramatically increased, raising concerns within the industry. This trend indicates that **why rug pulls are becoming more devastating** lies not just in their frequency but in the magnitude of financial losses. As the crypto space becomes increasingly saturated with memecoins and speculative projects, developers often prioritize rapid growth and investor hype over security.

The Mantra’s OM token collapse, which accounted for a staggering $6 billion loss, exemplifies the dangers posed by unverified projects in a volatile market. This situation underscores the necessity for enhanced vigilance among investors, who must now navigate a field where even fewer projects can lead to catastrophic losses. Additionally, Gherghelas suggests that as the industry matures, so do the tactics used by malicious actors, necessitating an evolution in how investors safeguard their assets.

Industry Implications

• Investors need to be wary of red flags like sudden spikes in wallet activity.
• Increased awareness and tools for detecting suspicious behavior are critical.
• The future of crypto investment may demand a higher level of scrutiny from all participants.

In summary, while the reduction in the number of rug pulls is a positive sign, the increased severity of financial losses highlights ongoing vulnerabilities within the crypto market.