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(OK, who went and made Hacker News text uncopyable?)

I think "rug pulls" is not defined well.

It's a standard type of investment scam, "take the money and run". The SEC even has a video for the clueless.[1] And a web site on ICOs.[2]

This scam long predates cryptocurrency, or the Internet. Newspapers made mass-marketing a scam possible. That started about two centuries ago. Most scam types, like this one, are old. They just keep coming around in shiny new wrapping paper. This isn't innovation.

[1] https://www.youtube.com/watch?v=FSBMSSnZ4Ro

[2] https://www.howeycoins.com/index.html

I just copied text out of your comment and pasted it here:

> It's a standard type of investment scam

The "innovation" here would be the ease in which communities can take over projects if they coordinate.

But upon a second reading, I don't think you get my point that there are categories of things called "rug pulls" and the chainanalysis article does not distinguish well. I also think distinguishing is not possible to reach consensus, right now, but attempts should be made.

> One example of a "rug pull" is that the team provided liquidity to the AMM liquidity pool, and then removed it, leaving people with no where to trade the token. Its honestly hard for me to call that a scam

If the team went through all of these steps with the intention of pumping the value of the coin, hyping others into buying it, and then extracting as much money from them as possible with no intentions of helping the coin succeed long-term, that seems like a scam to me.

The victim-blaming mentality runs deep in the cryptocurrency world. It's fascinating how many people in the cryptocurrency space are reluctant to call a spade a spade only because the underlying blockchain or algorithmic rules weren't violated.

And you think thats what I just did here? Describing why the categorization is wrong to you is a symptom of victim blaming?

My point stands that the community can do what the team did but fail to take further risk or organize. They disperse just like the issuer did, when in fact they do all have agency and can fill the vacuum. unless the token was backdoored, then we can call it a scam.

If the original team made promises with no intention of fulfilling them, and didn't, it's a scam. If on the other hand the community could do the same thing .. why did they need to pay the organizers (and their premine) in the first place?

team allocations aren't always the case. if chainanalysis is looking at the rug pulls that I'm talking about, then much of the time there was no upfront capital to the team with a separate premined allocation. many issuers are currently putting all the tokens created directly into a liquidity pool paired against capital they already had, bots and individuals buy into the liquidity pool and receive the new token, pushing up the price in the process, and then the issuer unbundles the liquidity pool, leaving no pool, (while acquiring the liquid capital added to the pool by purchases. AMMs function by then having less of the issuer's tokens and more of the tokens that were used to purchase the issuer's token)

these are colloquially called rug pulls, because the liquidity pool was the rug. these happen so fast these days. These things can play out completely within 20 minutes, as bots and individuals are scanning the blockchain mempool for erc20 token creation transactions and liquidity pool creation transactions, just to get into a potential big project before anyone else.

here, the traders are at no disadvantage to the issuer, from a community perspective, to continue the project and attempt making their investment valuable, specifically by adding to a liquidity pool themselves.

again, my main point is that things that are very common are not being distinguished from whatever you or others want to argue about. its an article about this year, not 2017, not 2018, or some other year dominated by an antiquated style of ICOs.

there is something to debate, but the vocabulary itself doesn't allow it, perpetuated by an organization that gets no benefit from distinguishing as all they want is technology contracts from governments.

Dogebonk is a good example of a community taking over a token, renouncing contract, locking liq etc. fascinating to see a true community meme engine revving up.

Great, yeah, a lot of people aren't inspired enough to consider doing that, and others don't know it happens. The more examples the better. People really aren't as helpless in the crypto space as they act, or prompt onlookers to think.