Rugging, a term for deceptive and fraudulent crypto practices, is rampant in some areas of the crypto industry, with some individuals, like the self-proclaimed meme coin rugger “Phantom,” exploiting vulnerabilities to generate significant profits.
Phantom, an anonymous crypto trader, revealed how he exploits the meme coin market on Pump.Fun to amass substantial profits, averaging 400 SOL per week, which equates to approximately $60,000 to $65,000.
In an interview with crypto YouTuber NFT Nate, Phantom described the process as “brain-dead easy,” emphasizing that anyone could execute these schemes with minimal capital. His approach involves setting up what he refers to as a “mass sniper,” a method that leverages tools like DogWiffTools to deceive potential buyers into thinking a token has genuine demand.
Phantom’s strategy involves creating and launching tokens in quick succession, relying on automated systems to make it appear as though multiple wallets are buying the tokens. This creates an illusion of organic interest, drawing in unsuspecting investors who then purchase the tokens at inflated prices. Phantom and others using similar methods can then execute a “dump all” command, which sells off their holdings in a single, rapid transaction, crashing the token’s price and leaving legitimate buyers with worthless assets.
Even former employees of Pump.Fun have been in trouble for exploiting its system, with one being arrested for a $1.9 million scam. He then advised users to withdraw funds, claiming Pump.Fun considered the platform’s TVL its own funds in a complaint against him.
The interview sheds light on the scale and ease of these operations, with Phantom candidly discussing how simple it is to create new tokens and execute these scams continuously. The use of sophisticated tools, such as DogWiffTools, enables rug pullers to automate much of the process, from generating multiple wallet addresses to setting delays that make the buying patterns appear more realistic.
As NFT Nate explored the mechanics of these scams, he uncovered that the majority of tokens launched on platforms like PumpFun are rugs, with an overwhelming 98.5% of them being dumped before they even reach exchanges like Radium. The statistics presented by Phantom are staggering, highlighting that out of nearly 2 million tokens launched, only a minuscule fraction achieve any lasting value, and even fewer reach significant market caps.
The implications of these practices are severe, reinforcing the cutthroat, person-versus-person nature of the memecoin crypto market. Phantom’s remarks suggest a grim reality: in the memecoin space where many projects are questionable, he believes it’s often a choice between rugging others or being rugged yourself. While this mindset is far from ethical, it reflects a pervasive attitude among some participants in the memecoin ecosystem.
NFT Nate’s investigation into these rug-pulling tactics is a stark warning to the crypto community. The tools and methods used by scammers like Phantom are becoming increasingly sophisticated, making it harder for even experienced traders to avoid falling victim to these schemes.