Memecoin Rug Pull? Base Faces Backlash After 90% Token Crash

Coinbase’s Layer-2 (L2) Network, Base, has faced intense backlash over rug-pull allegations after it promoted an unofficial memecoin that crashed by over 90%, sparking a debate about the future of memecoins and on-chain content.

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The Rise And Fall Of Base’s Unofficial Memecoin

On Wednesday, Base’s official X account posted an image with the text “Base is for everyone.” Moments later, they shared a link to the on-chain social protocol Zora and the caption “Coined it,” sparking a speculative frenzy among investors.

The protocol allows users to make social media posts into tradable tokens, automatically minting them. After Base’s post was turned into a token, the crypto community quickly skyrocketed its market capitalization to $17 million.

However, online reports showed that the memecoin collapsed by around 92% after the top holders, who owned 47% of the supply, sold the memecoin just over an hour after launching.

Some community members noted that the token was “HORRIFICALLY sniped,” while on-chain data analytics platform Lookonchain highlighted that “3 wallets bought a large amount of ‘Base is for everyone’ before Base posted and sold them, making a profit of ~$666K.”

As a result, the community criticized the network’s team for the memecoin, calling the incident a rug pull and asking them to “stop launching worthless tokens that will all inevitably go to 0. You are diluting your brand and the value of real base assets.”

Zora data shows Base has earned around $81,000 from the memecoin, which has recovered from the initial sell-off with a peak market capitalization of $26 million before retracing to the $9 million-$10 million range.

Base’s Public Experiment

Base responded to the backlash, clarifying they will never sell their holdings, but they weren’t an official network token either. The team explained that they posted on Zora because they believe everyone should bring content on-chain and use the tools that make it possible.

Memes. Moments. Culture. If we want the future to be onchain, we have to be willing to experiment in public. That’s what we’re doing. To be clear, Base will never sell these tokens, and ​​these are not official network tokens for Base, Coinbase, or any other related product. The content we share is creative, and we’re going to keep bringing culture onchain.

The public on-chain experimentation opened a debate about memecoin culture and on-chain content, with Base’s creator, Jesse Pollak, weighing in.

In a series of X posts, Pollak explained that “not all coins are the same,” outlining the differences between these two types of tokens.

Is On-Chain Content The Future For Creators?

According to his posts, a contentcoin is one piece of content with singular value and no expectations. Additionally, multiple of them can be created by the same person, with “big ones” potentially turning into memes.

On the contrary, a memecoin is an “aggregation of content,” with aggregated value and high expectations, where the creator “should” only create one. He also noted that big ones turn into projects.

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Pollack considers that “someone has to normalize putting all of our content onchain. and i’m not afraid for it to be us. why? because in the wake of the chaos, we’ll normalize the behavior and create a better future for creators.”

Nonetheless, many users remain skeptical, with community members also criticizing Base’s post announcing investors can mint a deleted scene of the “Vitalik: An Ethereum Story” documentary, where the project’s founder, Vitalik Buterin, shows what’s in his backpack.

“Through ‘the financialization of everything’ we come to learn that most things are worthless,” the user stated.

Featured Image from Unsplash.com, Chart from TradingView.com