The new cryptocurrency token called “Base is for everyone” experienced an astronomical crash. In fact, within a mere 20 minutes its value crashed by almost 90%. The incident has been a lightning rod for controversy and raised alarms over possible rug pull scams in the decentralized finance (DeFi) arena. The token has kicked off on the Base network, which is an Ethereum layer-2 scaling solution. In a little over an hour, its market cap soared to a whopping $17.1 million before crashing to earth with a vengeance. The token was minted on Zora using the “Create” format.
The token's rapid ascent and subsequent decline have raised questions about market manipulation and the risks associated with investing in newly launched cryptocurrencies. The new Base’s official account on X even posted a tweet reading “Base is for everyone.” This led others to believe that the token had an official connection to the network. As Base operator Coinbase has pointed out, the token isn’t associated with them.
The incident serves as a reminder that investors should proceed with caution and conduct ample research before interacting with new and untested crypto assets. The token’s collapse is an unfortunate and sobering reminder of the kind of dangerous hazards that can be found in the new and exciting world of decentralized finance.
Token Launch and Initial Surge
The Base is for everyone’ token is now live on the Base network as an ERC-20 token. We’re excited to share this, produced with the pioneering Zora “Create” format. This automated process, known as a token generator, enabled the rapid creation of this type of token, which surged in popularity among the crypto community. The Base’s official verified account on X, short for Twitter, posted a completely innocuous looking message. In under 69 minutes, the market cap for the token reached an astonishing $17.1 million!
This speedy expansion of the token’s market cap piqued the interests of various investors. They were thrilled by the allure of easy money and its ties to the Base network. This early growth hid serious weaknesses that would go on to cause it to crash and burn.
One wallet connected to Base got the entire 10 million tokens, or 1% of the total supply. This unusual distribution added even more fire to speculation that there was some sort of Base network link.
The 90% Crash and Token Distribution
As the value of the token plummeted around 90% in under 20 minutes, it left countless investors holding the bag with irreversible losses. Rather, what we witnessed was an orchestrated crash from a coordinated sell-off. This decision was spurred by the top three wallets that control 47% of the total token supply. These wallets sold off their holdings, kicking off a wave of sell orders and causing the price to plummet.
Only a few wallets possess a huge share of the token supply. This level of concentration is risky for market manipulation and the threat of a potential rug pull. The quick sell-off that came from the wallets’ actions solidified the worst-case scenario and left countless investors holding the bag at an enormous loss.
Coinbase reassured customers that the token was not an official Base product. In a post on X, the company explained that the token is unrelated to Coinbase.
Community Fallout and Industry Reaction
The incident has sparked widespread criticism and controversy within the crypto community, with many accusing the token creators and early holders of orchestrating a rug pull scheme. Investors who lost money have expressed their frustration and anger, demanding accountability and calling for greater regulation of the DeFi space.
“When it comes to financial benefits, it’s no longer culture, whether it’s onchain or not” - Pink Brains
Let the fall of the “Base is for everybody” token serve as a wakeup call to investors to always tread carefully. It highlights the overall importance of conducting rigorous research and actively mitigating risks when handling novel, untested crypto assets. This specific incident demonstrates the inevitable need for increased transparency within DeFi. It underscores the need for stricter enforcement measures to safeguard investors against fraudulent scams.
