Coinbase's new layer-2 blockchain project, Base, has seen an influx of $68 million in ether (ETH) even before its official launch. The surge in activity appears to be linked to the skyrocketing popularity of meme coin BALD, which saw a staggering 4,000,000% surge and attracted traders seeking substantial returns. Despite not being accessible to the public yet, the Base blockchain has managed to outperform popular networks like Arbitrum, raising intrigue among the crypto community.
Base, a blockchain-based bridge built by Coinbase on the OP Stack, was initially made available to developers for testing purposes, ahead of the planned full launch later in the year. These bridges enable the seamless transfer of tokens between multiple networks, and Base, with its potential to facilitate the transfer of meme coins like BALD, has garnered significant attention.
In the past 48 hours, on-chain data has shown over $68 million worth of ether being bridged to the Base network, in contrast to the $500,000 to $700,000 daily inflows recorded before the meme-coin frenzy. Notably, one particularly active wallet moved $13 million worth of ether to the network, while no other wallet exceeded $1 million.
The meme coin BALD, which can be traded via the decentralized exchange LeetSwap built on top of Base, experienced a massive surge over the weekend, reaching an astronomical 4,000,000% increase from issuance to its peak price. This surge was widely publicized on social media application X, drawing a flood of traders to bridge their funds to Base, despite the lack of a fully functional two-way bridge. One trader, in just under 12 hours, turned $500 into $1.5 million, further fueling the fervor for quick fortunes.
Tokens based on Base, such as brian (BRIAN), toshi (TOSHI), and basedbot (BOT), also witnessed exponential price jumps, providing early investors with significant multiples on their initial investments. However, the lack of underlying fundamentals behind these tokens meant that early buyers and influencers reaped the most significant gains, leaving followers with losses as they were left holding tokens that lacked liquidity for an exit.
Moreover, opportunistic developers exploited the situation by deploying hundreds of tokens, only to execute rug pulls later on, causing considerable losses to unsuspecting investors. Some users also discovered that the popular picks they bought, such as BALD and BOT, were actually imitations that were not tradable on the open market.
Despite the hype and temporary profits, some traders cautioned against getting caught up in the FOMO (fear of missing out) mentality associated with meme coins. Jeff Mei, COO of crypto exchange BTSE, acknowledged that meme coin culture is a persistent force in the crypto landscape, driven by retail traders with a desire for quick profits. However, he warned against ignoring the speculative and volatile nature of these tokens, which lack the practical use cases associated with more established cryptocurrencies like Ethereum (ETH).
Not everyone is optimistic about Base's prospects. Mikolaj Zakrzowski, a Web3 analyst at CryptoQuant, expressed skepticism about the fundamentals supporting Base's rise. He pointed out that a single entity was responsible for bridging over $17 million worth of ether, significantly influencing the total value locked in the Base protocol. This concentration of influence raises concerns about the sustainability and long-term viability of the Base blockchain.
In conclusion, the surge of $68 million in ether to Coinbase's Base blockchain amid the meme-coin mania has attracted significant attention. However, cautionary voices warn against being blinded by quick profits and emphasize the speculative and volatile nature of meme coins. The concentration of funds in the hands of a few entities further raises questions about the blockchain's fundamental support and its long-term viability in the ever-evolving crypto landscape. Investors and traders are advised to exercise caution and conduct thorough research before diving into the world of meme coins and nascent blockchain projects.