Glossary
Pump and Dump
A manipulation scheme where promoters inflate a token's price with coordinated hype and buying, then sell their holdings into the demand they created.
A pump and dump is market manipulation adapted to thin, unregulated crypto markets. Insiders accumulate a low-liquidity token cheaply, then "pump" it: coordinated buying, paid influencers, Telegram signals, and fabricated momentum pull in retail buyers chasing a rising chart. Once the price spikes, the organizers "dump" their bags into that demand, and the token collapses back toward zero.
The structure is as old as penny-stock boiler rooms, but on-chain it is faster and cheaper to run: anyone can launch a token, seed a liquidity pool, and market it in hours. Red flags include a supply concentrated in a few wallets, anonymous promoters promising guaranteed returns, and sudden volume with no real product behind it.