Memecoin mania hits Base: Obscure tokens surge due to rug pulls and FOMO

Memecoin mania hits Base: Obscure tokens surge due to rug pulls and FOMO

The Blockchain Industry and Memecoin Madness

The blockchain industry has been witnessing a surge in memecoin madness, with Coinbase’s Ethereum layer-2 scaling solution Base at the forefront. Memecoins, characterized by their extreme volatility and speculative nature, have become a hot topic among traders and investors.

One prominent memecoin that gained attention on Base is the Brian Armstrong-themed token called “BALD.” Despite lacking an official website or utility, BALD experienced an astonishing 289,000% gain within the first 14 hours of trading. It is evident that the memecoin frenzy has taken hold in the cryptocurrency market.

However, it’s important to approach memecoins with caution. Many investment professionals have likened investing in memecoins to gambling adjacent activities. The unpredictable swings in memecoin prices and the potential for scams and rug pulls have led to significant financial losses for some investors.

In the case of BALD, a few lucky investors managed to score a 100,000% return on their initial investment within a short period. Data from blockchain analytics service Lookonchain revealed that four wallet addresses swapped 0.5 Ether (ETH) into BALD within the first four minutes of trading. Eight hours later, they exchanged their BALD tokens back to ETH, earning a total of 554 ETH, equivalent to over $1 million at current prices. It’s a prime example of the extreme volatility and extraordinary gains that can occur with memecoins.

Another memecoin making headlines on Base is BASED. Within just 20 hours, BASED witnessed a staggering surge of over 1,000,000%. With a fully-diluted market cap of $1.39 billion, BASED has surpassed the valuations of established blockchain networks like Aave (AAVE) and Optimism (OP). This skyrocketing valuation, however, should be viewed with caution, as memecoins are known for their short-lived hype and potential for rapid decline.

The memecoin craze on Base has also highlighted the risks associated with scam projects and rug pulls. In one instance, a developer ran off with funds deposited by eager investors, promising to multiply their money and return it. However, the promised returns never materialized, and the developer disappeared after deleting their Telegram account.

Market participants and experts have voiced their concerns about jumping into memecoin investments at this late stage. Pseudonymous professional trader “Horse” advised against FOMO (Fear Of Missing Out) buying, warning that the memecoin market is rapidly shifting from one token to the next. Being someone’s exit liquidity could potentially lead to significant losses.

To understand the trading dynamics on Base, it’s essential to grasp the technical aspects. Coinbase launched the Base network for developers on July 13, and trading on Base remains relatively complex. Interacting with tokens on the Base network requires investors to send their ETH to a Coinbase developer contract address and then swap that ETH into the token of their choice on specialized decentralized exchanges like LeetSwap.

Notably, tokens on the Base network cannot be bridged off to other chains. Once Ethereum is deposited on the Base network, it is locked until developers introduce a token bridge, allowing transfers back to the main Ethereum network.

In conclusion, the blockchain industry has witnessed a wave of memecoin madness on Coinbase’s Base network. While memecoins such as BALD and BASED have delivered unprecedented gains for some investors, their speculative nature and the presence of scams and rug pulls call for caution. As the industry continues to evolve, it is crucial for traders and investors to understand the risks associated with memecoins and make informed decisions based on comprehensive research and analysis.

Table of Contents:

  1. Introduction
  2. The Rise of Memecoin Madness on Base
    • BALD: The Unofficial Memecoin Sensation
    • BASED: The Astonishing Rally
  3. The Risky Side of Memecoins
    • Rug Pulls and Scams
    • Cautionary Words from Experts
  4. Understanding the Technicalities on Base
    • Trading Dynamics on the Base Network
    • Limitations of Token Bridging
  5. Conclusion

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