Memecoin madness has arrived on Coinbase’s Ethereum layer-2 scaling solution Base, bringing with it everything from remarkable shitcoin surges to classic token rug pulls.
On July 30, memecoin traders were snapping up a suite of questionable tokens on Base, with one Brian Armstrong-themed memecoin dubbed “BALD” experiencing a 289,000% gain within the first 14 hours of trading.
This is despite the Bald token not having any official website, or any discernable purpose, creator, or utility.
According to data from blockchain analytics service Lookonchain, a small number of investors managed to score a 100,000% return on a relatively small initial investment.
Four separate wallet addresses swapped 0.5 Ether (ETH) — worth roughly $950 at the time — into BALD within the first four minutes of trading. Eight hours later, the wallet addresses swapped their BALD into ETH for a total of 554 ETH which is worth more than $1 million at current prices.
Earned $1M with $1K in 1 day! pic.twitter.com/gXIDRjbhic
— Lookonchain (@lookonchain) July 30, 2023
Another memecoin featuring the ticker BASED has also gone on an incredible rally, surging well over 1,000,000% in the last 20 hours.
At current, BASED commands a whopping $1.39 billion fully-diluted market cap, making it more valuable — at least on paper — than mainstay blockchain networks Aave (AAVE) and Optimism (OP).
Rug pulls and memecoin gambling
However, as many investment professionals have stated in the past, memecoins are notorious for their massive swings in price and any investment in them should be treated as gambling adjacent.
The sudden influx of hundreds of new, un-backed tokens also brings with it the potential danger of scams, rug pulls and severe financial losses.
One developer reportedly made off with an undisclosed sum of ETH deposited by eager investors, promising to return it after they had multiplied their funds.
OMG some presale on Base just rugged and dev sent a whole ass apology letter pic.twitter.com/rcmMcP7F7i
— punished echo (@OHEXE_ECHO) July 30, 2023
“You will get your ETH back. I just need to multiply it,” the developer wrote upon deleting their Telegram account.
Meanwhile, others have warned that the memecoin surge is likely already over.
Pseudonymous professional trader “Horse” informed his 180,000 followers that FOMO buying into tokens such as BALD at this late stage would most likely be a bad idea.
You are not early to $BALD if you are not already up.
The market is leap frogging from one thing to the next right now.
Don’t be someone’s exit liquidity on this fine Sunday.
— HORSE (@TheFlowHorse) July 30, 2023
Coinbase launched the Base network for developers on July 13, as such, trading on Base remains relatively technical.
Interacting with tokens on the Base network requires investors to send their ETH to a Coinbase developer contract address and then swap that ETH into the token of their choice on a specialized decentralized exchange such as LeetSwap.
Notably, Base users are unable to bridge their tokens off the network. Once ETH is deposited on the network, it cannot be transferred back to another usable chain like Ethereum until Base developers introduce a token bridge.