Coinbase-supported layer-2 blockchain Base has garnered substantial amounts of Ethereum (ETH) in funding before its official release.
Base experienced greater trade traffic and transactions over the weekend than more seasoned networks like Arbitrum, totaling more than $200 million.
Traders have flocked to the blockchain in the expectation of reaping significant profits, notably from meme coins, despite it not yet being accessible to the general public.
For instance, on-chain data shows that with the rise of the meme coin BALD, almost $68 million worth of Ether was bridged to Base in just 48 hours.
Daily inflows were just between $500,000 and $700,000 before the weekend.
The price of BALD, a cryptocurrency that can be traded on Base’s LeetSwap decentralised exchange (DEX), skyrocketed by nearly 4,000,000% from the time it was first issued to its peak.
Within 24 hours, it had a trading volume of more than $100 million.
This story soon gained traction on social media, drawing a large number of traders looking to take advantage of the chance to make quick money.
The token has now suffered a severe setback, falling more than 78% from its all-time high.
The sudden decline happened after a developer on the Ethereum layer-2 network Base on Monday completely removed all of the liquidity from the BALD meme coin, a move known in the cryptocurrency world as a “rug pull.”
Base Produces a Reproductive Environment for exploiters.
Even though traders continued to swarm to the Base in spite of the lack of a functioning two-way bridge, it did provide a fertile environment for unethical behaviour.
Following an early increase of thousands of percentage points, some tokens, like Brian (BRIAN), Toshi (TOSHI), and Basedbot (BOT), have experienced a dramatic decline, leaving followers with small gains and making it difficult to find exit liquidity.
In addition, shrewd developers took advantage of the circumstance by releasing tonnes of tokens just to carry out rug pulls later.
Even worse, some users found out they had unintentionally bought fake tokens that couldn’t be sold on the open market.
However, some traders think that this influx of money into Base is the result of token holders looking for opportunities to profit in a market that is generally inactive.
Mei stressed the need to avoid getting sucked into the frenzy and expressed caution about the very speculative nature of meme currencies.
Some people are sceptical about Base’s long-term prospects, despite all the buzz around it.
Concerning the principles of the blockchain, Mikolaj Zakrzowski, a Web3 analyst at on-chain analytics tool CryptoQuant, voiced his scepticism.
One address alone crossed over $17 million in ether, according to Zakrzowski, suggesting that Base’s rise may not be wholly underpinned by firm foundations.
Base, a blockchain-based testing platform built on OP Stack, launched for developers in July.