FOMO and Rug Pulls Fuel Memecoin Mania on Base

The madness of memecoin has come to Coinbase’s Ethereum layer-2 scaling solution Base, bringing with it remarkable price surges for certain shitcoins and token rug pulls.

On July 30, traders were buying up memecoins on Base, including one Brian Armstrong-themed memecoin called “BALD” that saw a 289,000% gain in just 14 hours.

This is despite the token having no official website, creator or utility.

According to data from blockchain analytics service Lookonchain, a few investors made a 100,000% return on a small initial investment in BALD.

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.

Another memecoin with the ticker BASED has also seen an incredible rally, with its price rising over 1,000,000% in the past 20 hours.

At present, BASED has a market cap of $1.39 billion — making it more valuable than Aave (AAVE) and Optimism (OP), two popular blockchain networks.

Rug pulls and memecoin gambling

Still, as many investment professionals have warned, memecoins are notorious for their highly volatile prices and any investment in them should be treated as a form of gambling.

The sudden emergence of hundreds of new, un-backed tokens also carries the risk of scams, rug pulls and considerable financial losses.

One developer was allegedly able to get away with a large sum of ETH deposited by eager investors, claiming to return it after they had increased their funds.

“You will get your ETH back. I just need to multiply it,” the developer wrote before deleting their Telegram account.

Others have suggested that the memecoin surge is likely already over.

The anonymous trader “Horse” informed his 180,000 followers that FOMO buying into tokens such as BALD at this late stage is most likely not a good idea.

Coinbase launched the Base network for developers on July 13; as such, trading on Base is still relatively complicated.

To interact with tokens on the Base network, investors need to send their ETH to a Coinbase developer contract address and then exchange that ETH into the token of their choice on a specialized decentralized exchange such as LeetSwap.

It is important to note that Base users are not able to bridge their tokens off the network. Until Base developers introduce a token bridge, it is not possible to transfer ETH deposited on the network to another chain like Ethereum.

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