A Coinbase spokeswoman told Cointelegraph that “Base did not launch a token” after the blockchain’s X account was slammed for sharing a tokenized, tradable social post, Cointeligraph reported.
Crypto exchange Coinbase distanced its blockchain network Base from a memecoin it shared that saw massive backlash after the token rapidly gained, then dropped in value by millions of dollars.
Base posted to X on April 16 with an image promoting the network with its marketing tagline, “Base is for everyone,” It also shared a link to a token of the same name on Zora, a social network where users can make posts into tokens for others to speculate on.
In just over an hour after it was created, the Base is for everyone token hit a peak market capitalization of $17.1 million — then dropped nearly 90% over the next 20 minutes to a market value of $1.9 million, DEX Screener data shows.
The token has since made a slight recovery and was trading around $7.7 million at the time of publication.
A Coinbase spokeswomen distanced Base from the token, telling Cointelegraph that “Base did not sell this token. Base posted on Zora, which automatically tokenize content,” the spokeswoman said.
The Block reported: Base, the Layer-2 network backed by crypto exchange Coinbase, is facing criticism from the crypto community for publicly endorsing a token that briefly lost most of its value shortly after launch. The token has since recovered nearly all of that value.
Earlier on Wednesday, Base posted, “Base is for everyone,” on Zora, an onchain social media network that automatically converts posts into tokens.
Then, at approximately 3:12 p.m., ET, the official Base X account promoted the token by uploading an image saying ‘Base is for everyone,’ followed by a reply post to the token’s page on Zora.
The official announcement from Base appears to have fueled the token’s rapid surge to a market capitalization of over $17 million. However, soon after its peak, the “Base is for everyone” token crashed about 95% in value, wiping out over $15 million, according to data from Dexcreener.
The initial collapse has triggered backlash from crypto users on X, some of whom label the token a rugpull and accused Base and Coinbase of endorsing a memecoin that would exhibit classic pump-and-dump behavior.
Bitcoin Insider reported: Coinbase’s Etherium Layer 2 (L2) chain, Base, has faced criticism for its content-tokenization initiative after its first auto-converted ERC-20 token on Zora pumped and dumped.
On April 16, Base’s simple “Base is for everyone” post on Zora was auto-converted into an ERC-20 token.
Within minutes, speculative fever drove the token’s market capitalization to over $17 million, only to see it collapse by approximately 95%, wiping out more than $15 million in value in a classic liquidity trap.
In the hours following the crash, the token exhibited a remarkable recovery, rallying above $0.021 before slightly pulling back to around $0.011 against Wrapped Ethereium (WETH) at press time in Uniswap.