Base, Coinbase’s Layer-2 network, is under fire after promoting a token that quickly lost 95% of its value, sparking accusations of a pump-and-dump. The team says the move was part of a broader experiment to tokenize digital content via its “contentcoin” initiative.
Background
- On Wednesday, Base used Zora, a platform that tokenizes social media posts, to publish a message that read “Base is for everyone.”
- This post was automatically converted into a token and then promoted by Base’s official X account.
- The resulting endorsement propelled the token’s market cap above $17 million before it nosedived 95% within hours.
- Blockchain analytics firm Lookonchain suggests three wallets bought in early and sold at the top, profiting roughly $666,000.
- The crash wiped out over $15 million before the token price partially recovered with market cap now sitting at around $13 million.
Why Should You Pay Attention?
- The episode has reignited debates around tokenized content, accountability in crypto marketing, and the responsibilities of major networks like Base, especially those affiliated with publicly traded companies like Coinbase.
- Critics say poor communication left users exposed to unexpected losses, highlighting the risks of experimental projects when promoted without proper clarity.
Who Said What?
- Base said in a post on X hours following the token price crash:
“Base is posting on Zora because we believe everyone should bring their content onchain... If we want the future to be onchain, we have to be willing to experiment in public. That’s what we’re doing.”
- Abhishek Pawa (AP Collective): Called the launch “disastrous,” adding that large holders offloading tokens “significantly damaged community trust.”
- Westie (Blockworks Research): Criticized the lack of transparency, saying “Most people had no idea what was going on and therefore were fooled into wrong assumptions.”
- Lookonchain: Tracked three wallets that profited $666K by selling after Base’s tweet.
- X user Clark10x: “You should have posted [disclaimers] before or immediately after under the buy link.”
Zooming Out
- Base’s experiment highlights the volatility of crypto culture and the thin line between innovation and miscommunication.
- As major networks experiment with blending content and tokens, clearer guidelines and disclosures may become necessary to prevent retail losses and maintain user trust.
- While “contentcoins” might offer new paths for creators and communities, this incident demonstrates how rapidly things can go wrong without coordinated messaging or safeguards.
