Coinbase-backed layer 2 network Base has come under criticism after launching a meme coin that quickly pumped and crashed in minutes.
According to the information gathered by CNF, a disclaimer was earlier issued by Zora, a platform where people can turn content into tokens; however, this could not stop the speculative wave.
How it Started
On April 16, Base posted a cryptic message – “Base is for everyone” on its official X account. About an hour later, Base made another post containing a link to Zora, hinting that its earlier message was minted as an ERC-20 token.
Despite Zora disclaiming that this is not an official Base token, buying pressure reached a significant level, pushing the market cap to around $17 million. However, this momentum was short-lived as the market cap crashed down to $1 million in a few minutes before moving further down to $623,000.
Critically subjecting the project to a comprehensive analysis, we found Lookonchain data suggesting that the top three wallets held almost half of the total supply of the coin. These wallets reportedly made a cumulative profit of around $666k.
According to market participants, some individuals might have had early information on the project. On-chain analyst Hantao Yuan hints that one wallet held 26% of the supply. He also observed that the fast-paced rise and fall of the asset was influenced by the presence of volume bots. Fascinatingly, more than 2,500 wallets were reportedly “caught in the trap.”
Following the crash, Base posted on its X handle, explaining that the token was part of its experimental initiative to tokenize content. According to them, this token is not officially linked to Coinbase, Base or its related product. Also, they would never sell these tokens as they represent the creativity in their contents and how it is “bringing this culture on-chain.”
Base is posting on Zora because we believe everyone should bring their content onchain, and use the tools that make it possible. If we want the future to be on-chain, we have to be willing to experiment in public. That’s what we’re doing.
Key Crypto Figures Speak on Base’s Meme Coin
After its response, Base received criticisms from market users, including the co-founder of Pump.fun, Alon. According to Alon, the decision to tokenize content without considering the realities of the current market situation puts users at great risk.
I’m a huge advocate for the vision of “tokenizing everything” but you can’t change current market realities – if you launch a coin AND have social influence, that comes with responsibility namely; the responsibility to stick to this space’s social standards to a tee – don’t launch or shill other coins, don’t set high expectations, don’t talk about price, etc.
Currently, the broad market struggles to hold its position as Bitcoin and the altcoins face major correction triggered by both internal and external factors, as discussed earlier. According to our recent analysis, the market could stage a rebound once key macro events tilt in favour of the risk assets.