Memecoins, rugs, and overnight millionaires: Inside BASE’s launch
An analytical look at BASE’s tumultuous weekend
Coinbase CEO Brian Armstrong | Steve Jennings/Getty Images for TechCrunch (CC license)
Over the course of a feverish weekend for speculators, a one-way bridge designed for developers to a chain that has not officially launched somehow became the latest crypto craze.
On Friday, July 28, the total dollar amount bridged to Base — a Coinbase-incubated layer-2 built on the Optimism stack that is ostensibly currently open only to developers — totaled under $1.5 million. As of Monday, July 31, that figure has ballooned to 43,000 ETH worth over $80 million, per a Dune Analytics dashboard.
The explosive growth has been fueled by a speculative frenzy after traders discovered a bridge that was designed to be one-way, meaning that funds could only enter Base and not leave — presumably an effort to prevent the exact kind of mania that has since occurred.
Highlights from the weekend include a flash-in-the-pan memecoin that ran to a $100 million market capitalization, DEX volumes in excess of $200 million on a 24-hour basis, and fortunes made and lost over mere hours.
Now that multiple tokens have proven to be scams, however, it remains to be seen whether Base can maintain its momentum.
By the numbers
According to Nansen, veteran cross-chain bridgers are among the most popular users of the Base bridge contract. Of the 98,000 addresses that bridged to Base, over 75,000 have also bridged to Polygon, Fantom or Binance Smart Chain. Additionally, bridging has proven to be popular among Smart Money, with three of the top ten depositors in terms of ETH earning the label.
While infrastructure such as lending marketplaces and native assets are scant, speculators made do with a pair of decentralized exchanges: LeetSwap and Rocketswap. Between them they have exceeded $230 million in volume in the past 24 hours across over 700,000 trades, per Dexscreener.
Sybil attacking new layer-2 networks is a popular activity among crypto power users, and despite the fact that Coinbase has publicly stated they have no current plans to release a governance token, the usage statistics (particularly the high number of addresses bridging to the chain and conducting low dollar-value swaps) indicates a strong airdrop farming presence.
Rugs abound
While many users appear to be engaged in sybil attacks and farming activities for a possible airdrop, a smaller subset have been looking to strike rich with memecoins — often to disastrous results.
The most popular of the memecoins was BALD — a play on Brian Armstrong’s famously bare scalp. Over 7,500 addresses traded BALD up to a $100 million market capitalization, fueled primarily by one address consistently adding liquidity to a LeetSwap pool.
On Monday morning, however, the deployer removed liquidity, added some back, and finally removed liquidity completely, effectively tanking the price of the memecoin down to zero. In all, the address made an estimated $5 million.
Other lowlights include a jilted trader making death threats on chain, as well as the developer of another scam promising to return stolen funds after trading them for a profit.
Updated Aug. 1, 2023 at 1:30 pm ET: The headline of this story has been updated to reflect that Base did not experience a chain halt.
Start your day with top crypto insights from David Canellis and Katherine Ross. Subscribe to the Empire newsletter.
Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. Subscribe to the On the Margin newsletter.
The Lightspeed newsletter is all things Solana, in your inbox, every day. Subscribe to daily Solana news from Jack Kubinec and Jeff Albus.
