Token debuts can be a controversial topic, often facing criticism for their poor execution which allows individuals to profit through front-running campaigns by supposedly having insider information about upcoming launches. The...
Token debuts can be a controversial topic, often facing criticism for their poor execution which allows individuals to profit through front-running campaigns by supposedly having insider information about upcoming launches.
The most recent example is the “Base is for everyone” token introduced by Coinbase’s Ethereum Layer 2 solution Base. Three crypto wallets acquired tokens before the official announcement, resulting in significant profits, according to blockchain sleuth Lookonchain.
Base announced the token’s debut through Zora, an on-chain social network, at around 19:30 UTC on Wednesday. The token quickly reached a market capitalization of over $15 million, bringing substantial gains to at least three crypto addresses that purchased coins before the official announcement.
According to Lookonchain, three wallets bought a significant amount of “Base is for everyone” before Base’s announcement and made a profit of approximately $666K. One wallet address invested 1.5 ETH to purchase 256.39 million units of the token and sold it for 108 ETH after the official announcement, earning $168,000 in just over an hour. Another address made a profit of $266,000, and a third address earned $231,800.
Following the announcement of another coin for FarCon poster, the token’s market capitalization dropped to less than $2 million, resulting in losses for those who invested in the Base is for Everyone token. However, valuations have since recovered, with the market capitalization of Base is for everyone surpassing $18.
Base clarified that the Base is for everyone coin is not the official cryptocurrency of Base, and the layer 2 did not directly sell them. The legal disclaimer on Zora also confirmed that Base will never sell these tokens.
The rapid rise and fall of these smaller tokens can create a negative wealth effect, benefiting only a select few while the majority face losses. This can lead to a drain of liquidity from the broader digital assets market. This year’s debut of LIBRA and TRUMP tokens resulted in the destruction of millions in investor wealth, marking a significant price top in bitcoin and the broader crypto market.
