Following the news that Mark Cuban was “duped” in a decentralized finance scam, stakeholders in the DeFi industry have become more wary of ‘rug pull' scams, in which developers ditch their token and disappear with the proceeds.
The term “soft rug” has been floated to describe the practice in which developers hightail it with community members' holding, effectively tanking the price to zero and putting an end to the project.
If Cuban could be taken in, a person who once said that crypto is “safe, unless you are stupid,” it indicates that even those who think they are clever enough and understand the industry could be wrong.
The fact that we hear of soft rugs today is indicative of how notorious such scams have become.
At first, soft rugs were simple in nature with developers riding the crest of crypto popularity and not putting in too much effort.
Now though, ill-meaning developers have become more insidious, taking the time to build trust and inspire confidence.
One recent example is Titan, the project that took Cuban by surprise. He is not alone, as a project by the name of Polywhale said it would be shutting down on June 20. A few days later, community members discovered that their tokens were gone.