What are “rug pulls” and how do I report them?
“Rug pulls” are broadly defined by the web3 community, and can include the NFT creator engaging in deliberate fraudulent behavior, ending the purported project soon after minting, deleting its website and socials, being unresponsive, or generally engaging in behavior akin to a scam.
Rug pulls are serious. They are heavily scrutinized and it is important that a NFT creator recognizes their obligations when offering their collection to the general public. The web3 space is quite rightly moving to an environment that clamps down on rug pulls.
We encourage creators to see our other guidance on this which sets out the quality and safety signals we look towards when a creator wishes to use Launchpad - “What are Magic Eden’s guidelines for Launchpad?”. These guidelines apply directly to projects that use Launchpad, but they similarly can be considered by creators that choose to mint on its own website or other platforms.
How to report a rug risk
In terms of reporting potential rug pulls, the decentralized manner of web3 encourages the community to help report and call these out so we can better inform other members of our community.
At the upper right hand side of a collection's page, you can click on the burger which surfaces the flag icon, then select the appropriate option. We'll review any reports that we receive and take the necessary actions, which may include permanently flagging the collection or removing the collection entirely.
What Magic Eden does to protect users from rug risks
We will always let the community decide which projects to collect and enjoy -- after all, this is one of the core tenets of Web3 and we expect users to always DYOR. Having said that, we will also try to ensure we protect our users from blatant scams and serial ruggers.
Should we discern signals that a project applying to list on Magic Eden is a high rug risk, e.g., project founder has rugged in the past, team has spammed our application process or attempted to game their Drop Calendar entry, then we will, at our discretion, reject the application and even blacklist the creator and any associated accounts.
Similarly, should we detect that projects are engaging in questionable practices such as using bots to amass upvotes for their Drop Calendar entry, wash trading (i.e., repeatedly buying and selling their own NFTs to inflate sales and earn a spot in our Popular Collections carousel), or market manipulation (e.g., imposing a sin tax), we may also remove their Drop Calendar entry, flag their collection page or delist their collection from our marketplace. More info on our high royalties policy here.
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