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Coinbase’s Base had 24 hours of meme coin frenzy, rug pulls and $58m in deposits

Coinbase’s Base had 24 hours of meme coin frenzy, rug pulls and $58m in deposits
Coinbase layer 2 Base played host to speculative meme coin frenzy over the weekend.
  • Bridge volume to Coinbase’s layer 2 blockchain Base spiked over the weekend.
  • The spike was triggered by a new meme coin that surged 2,900-fold in 14 hours after its launch.

Coinbase’s Base project became the scene of a multi-million meme coin drama this weekend.

When the world’s second biggest crypto exchange rolled out Base in February, the decentralised finance community welcomed it with open arms, seeing it as a way to bridge the gap between centralised corporate exchanges like Coinbase and decentralised protocols.

However, in the space of 24 hours this weekend, the network saw users ride a wave of frenzied activity on Base to launch a flurry of meme coins.

Many of these tokens have been accused of being rug pulls, crypto scams that involve the sudden removal of liquidity leaving investors holding worthless tokens.

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One alleged serial rugpuller launched 29 such scams on Base, according to on-chain analytics platform Scopescan.

This entity initially bridged $103,000 to Base and got away with over $1 million after pulling off these heists.

Scopescan stated that the scammer also has a history of rugging on BNB and Arbitrum blockchains.

The surge saw crypto deposits to Base reach $58 million on July 30.

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For comparison, the total crypto volume bridged to Base throughout July was only $2 million.

Total crypto deposits to Base now stands at $66 million, according to data from on-chain analytics platform TKV Research.

And all of this is happening before Base has even launched its public mainnet.

While it has rolled out a mainnet for developers that allows applications to be deployed on Base, a public mainnet launch is reportedly planned for August.

NOW READ: Coinbase’s new Base project will ‘tempt users over to DeFi’

Users get around the lack of a canonical bridge by sending funds to a contract address — a unique identifier for a smart contract on the blockchain — which then directs the deposit to their wallet address on the Base chain.

If depositing to Coinbase’s blockchain is convoluted, the withdrawal process is even more so.

Users have to bridge the funds to Arbitrum before being able to direct their withdrawals to the Ethereum mainnet and this process takes a week to complete.

BALD-faced drive

The Base bridging frenzy began when a wallet address deposited $12 million worth of Ether on July 30. The address then created a token called BALD. This sparked a wave of deposits to the chain.

Such so-called stealth launches where the token creator deposits a healthy sum of liquidity usually attracts significant interest among crypto traders. That was the case this time too.

Wallet addresses with significant holdings in other memecoins like PEPE soon began bridging to the chain, with several of them taking significant positions in BALD.

NOW READ: Coinbase says ‘we screwed up’ after Pepe the Frog backlash

As a result, the token surged, earning early investors outsized returns. Crypto Twitter soon grew awash with tales of investors who turned a few hundred dollars into millions.

The price of BALD has since crashed 90% as the token creator removed $13 million worth of liquidity from the market.

Coinbase did not return requests for comment.

To share tips or information about Layer 2 blockchain please contact me at osato@dlnews.com.

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