A project that abandons users gradually rather than stealing outright: the team sells, development stops, and the token bleeds to nothing.
Nothing illegal necessarily happens. Liquidity may stay locked, the contract may be clean, and the team simply distributes allocated tokens into whatever demand exists while updates slow and the community manager goes quiet. See rug-pull for the abrupt version.
The tells are behavioural rather than technical: roadmaps that slip without explanation, treasury wallets steadily sending tokens to exchanges, founders becoming pseudonymous or disappearing, and a pivot to a new narrative every cycle. On-chain, team wallet flows are public and worth watching.
Because there is no single moment of theft, recovery and prosecution are rare. The practical protection is position sizing on anything early-stage and tracking whether the tokens you hold have a token-unlock schedule that guarantees supply arriving into a thinning bid.
Original diagrams for the ideas on this page. Illustrative, not real market data.
The bid-ask spread. Buy orders sit below, sell orders above, and the gap between the best bid (50.01) and best ask (50.04) is the spread you pay to cross. Bar length shows the size resting at each price.Working out a position size. Three numbers decide how big a trade is: the account, the share of it put at risk, and the distance from entry to stop. One percent of $25,000 is a $250 budget, and a $0.50 stop divides into that 500 times.
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