Several wallets profited significantly from “Base is for everyone” token before Base’s official announcement on X.
Token launches have long been a controversial subject, often criticized for their lack of regulation, which allows individuals with insider information to profit through front-running tactics.
The latest controversy surrounds the “Base is for everyone” token, introduced by Coinbase’s Ethereum Layer 2 network, Base, on Wednesday. According to blockchain researcher Lookonchain, three crypto wallets bought the token before its official announcement, securing substantial profits.
Around 19:30 UTC, Base announced the debut of its token, minted via Zora, an on-chain social network that transforms content into tradable coins. The token quickly surged in value, reaching a market cap of over $15 million. Those who purchased before the official announcement saw substantial gains.
“Three wallets bought significant amounts of ‘Base is for everyone’ before @base posted and sold them, making a profit of about $666K,” Lookonchain tweeted.
One wallet, 0x0992, spent 1.5 ether (ETH) to acquire 256.39 million tokens at 12:30 PM UTC. The wallet sold the tokens for 108 ETH after the announcement, making a profit of $168,000 in just over an hour. Another wallet, 0x5D9D, invested 1 ETH ($1,580) and earned $266,000, while a third wallet, 0xBD31, took home $231,800.
After the initial excitement, the token’s market capitalization plummeted to less than $2 million when Base unveiled a new coin related to its FarCon poster, causing a liquidity drain. However, the token’s valuation has since bounced back, with its market cap surpassing $18 million as of the latest data from DEX Screener.
Jesse, the creator behind Base, explained the token’s purpose: “The goal is to normalize putting all content on-chain,” he said.
Coinbase clarified that the “Base is for Everyone” token is not the official cryptocurrency of Base, and that it did not sell these tokens directly. A Coinbase spokesperson told CoinDesk, “Base posted on Zora, which automatically tokenizes content.”
Base further clarified on X, saying, “To be clear, Base will never sell these tokens, and they are not official network tokens for Base, Coinbase, or any other related product. The content we share is creative, and we’ll continue to bring culture on-chain.”
The volatility surrounding these smaller tokens often results in a negative wealth effect, where only a few individuals benefit, while the broader market suffers. This dynamic can drain liquidity and contribute to broader market instability.
For example, the launch of the LIBRA and TRUMP tokens earlier this year destroyed millions in investor wealth, creating a major price peak for Bitcoin and impacting the broader crypto market.
