TL;DR
A pump and dump is a manipulation scheme where insiders artificially inflate a token’s price through coordinated buying and hype, then sell their holdings at the peak, crashing the price.
A group of insiders buys a large supply of a new or low-cap token. They then promote it aggressively through Twitter, Telegram, and paid influencers, creating artificial FOMO. As retail traders pile in, the price pumps. Once the price reaches a target, insiders sell simultaneously, crashing the price. The entire cycle can play out in minutes on Solana due to fast block times and low fees.
A rug pull involves the developer removing liquidity or exploiting contract mechanics to steal funds directly. A pump and dump doesn’t require developer involvement — any group of coordinated wallets can execute one on any token. The token contract may be perfectly safe; the manipulation is purely through trading activity and social engineering.
Signs include sudden volume spikes with no organic catalyst, coordinated shill posts across social media, and wallet clusters buying in rapid succession. Bundle detection in Token Scanner can identify coordinated buying patterns. Wallet Scanner shows if wallets promoting the token are also large holders. If multiple fresh wallets are buying the same token within seconds, it’s likely a coordinated pump.