Terminal-Ill Developer Rug Pulls in DeFi and Web3: Assessing the Emotional and Financial Risks of Last-Minute Project Exits

In 2025, the DeFi and Web3 ecosystems have witnessed a paradigm shift in rug pull dynamics. While the frequency of these scams has declined by 66% compared to 2024, the financial impact has surged to nearly $6 billion—a staggering 6,499% increase from the $90 million lost in the same period in 2024Rugpull Losses Soar 6,500% in 2025 as Crypto Scams Turn Deadlier^[1]. This evolution underscores a troubling trend: fraudsters are now prioritizing scale over volume, leveraging emotional manipulation and sophisticated tactics to execute devastating exits.

The Financial Toll: From DeFi to Memecoins

The most egregious example of this shift is the collapse of the Mantra Network, a DeFi protocol that accounted for 92% of 2025's rug pull losses. The OM token's value plummeted by 90% after liquidity was drained, leaving investors with a $5.5 billion lossCrypto Rug Pull Threat Shifts: Fewer But More Damaging 2025^[2]. While traditional DeFi protocols dominated rug pulls in 2024, 2025 has seen a pivot toward memecoins, which now constitute the majority of incidentsCrypto rug pulls have slowed, but are now more ... - Cointelegraph^[3]. The 120 Hours memecoin, launched on Solana's Pump.fun platform, epitomizes this trend. Its developer, who claimed to have 120 hours to live due to a terminal illness, promised trading fees would support his family. However, liquidity was siphoned, and the token's value collapsed from a $534,300 market cap to zeroTerminal ill developer rug pulls: 'I have 120 hours to live..'^[4].

Emotional Manipulation: The Psychology of Exploitation

Rug pulls in 2025 exploit psychological vulnerabilities with alarming precision. Scammers craft narratives that evoke urgency, empathy, or FOMO (fear of missing out) to bypass rational scrutiny. The 120 Hours case, for instance, leveraged a tragic personal story to gain trust, a tactic that resonates deeply in a market where retail investors often prioritize sentiment over due diligenceWhat are Rug Pulls and How to Spot It: 7 Critical Red Flags^[5]. According to a report by CoinLaw.io, such emotional appeals are amplified by AI-generated branding, influencer endorsements, and social media campaigns, creating a false sense of legitimacyThe Psychology of Rug Pulls: Why We Fall for the Same Scams^[6].

The psychological toll on victims is profound. Investors not only face financial ruin but also grapple with betrayal and self-doubt. As noted in a 2024 analysis by Jesse Hirsh, rug pulls erode trust in decentralized systems and foster a culture of skepticism72: The Rise of the Rug Pull Economy - by Jesse Hirsh^[7]. The emotional finance framework further explains this dynamic: anxiety and excitement drive impulsive decisions, while optimism bias leads investors to underestimate risksThe Impact of Emotional Finance, and Market …^[8].

Broader Implications and Investor Safeguards

The 2025 rug pull landscape highlights a critical need for investor education and regulatory vigilance. Platforms like Pump.fun, which facilitate rapid token creation, must implement stricter safeguards to verify smart contracts and developer identitiesWeb3 Ecosystem Faces $6 Billion Loss from Rug Pulls in 2025^[9]. Meanwhile, investors should prioritize projects with transparent teams, audited code, and verifiable track records. Red flags—such as unexplained spikes in activity or anonymous developers—demand immediate scrutinyRug Pulls & Ponzi Schemes in Crypto Statistics 2025 •^[10].

As the crypto space matures, the line between innovation and exploitation grows increasingly blurred. The rise of terminal-ill developer narratives and memecoin scams underscores the importance of balancing empathy with skepticism. For investors, the lesson is clear: in a market driven by emotion and speculation, due diligence is not just a best practice—it is a survival mechanism.