Scope data on July 31 reveals that 29 meme cash had been launched over the weekend on Base to capitalize on the current frenzy surrounding BaldBaseBald (BALD), a meme coin impressed by Coinbase CEO Brian Armstrong.
However, all 29 meme cash have since been rugged, with the deployer exiting with over $1 million after seeding roughly $105,000 of ETH as liquidity. Base is an Ethereum layer-2 platform primarily based on Optimism roll-up expertise.
Rug Pulls On Base
On July 29 and 30, there was pleasure concerning the meme coin, BALD, as its costs exploded by as a lot as 4,000X, pushing the token’s market cap to over $100 million. This was nice information for individuals who invested early as some exited because the wave rise, profiting.
Some builders took benefit of the hype and created meme cash to deceive buyers keen to affix the BALD development, ultimately leading to losses for some meme coin token holders.
While BALD has already been rug-pulled, Scope notes that the tackle behind the 29 meme cash additionally has a historical past of rug-pulling in different platforms, together with the BNB Chain and Arbitrum, a well-liked Ethereum layer-2 platform. In platforms the place meme cash are traded, liquidity, supplied by the group, is important as a result of decentralized nature of buying and selling.
Rug pullers usually provide liquidity to their meme cash, which attracts extra customers to purchase the coin and will increase liquidity as costs rise. However, the creator then intentionally withdraws liquidity at this level, changing their meme cash to a extra liquid coin like Ethereum, inflicting their token costs to drop to zero.
As of July 31, hours after the rug pull, the tackle primarily held USDC and a small portion of ETH of their portfolio, with no meme cash. This probably highlights the rug puller’s risk-averseness and his issues concerning the dangers concerned on this asset class.
Related Reading: (*29*) Crucial Moment: Will Resistance At $29,500 Trigger A Sell-Off Or Surge?
Meme Coins Are Volatile
Meme cash are fashionable in crypto, particularly Ethereum, the place they’re minted as fungible ERC-20 tokens of their trillions. Dogecoin, endorsed by Elon Musk, is probably the most liquid and well known.
Despite rising reputation, there are issues about their volatility and lack of utility, with some critics labeling them as “casinos” that undermine the true imaginative and prescient of crypto in its place monetary system.
For instance, the collapse of BALD, which commanded billions in market cap on Base over the weekend, has drawn widespread condemnation. Besides BALD, different like PEPE and LADYS are struggling, dropping by over 70% from their all-time peaks registered in H1 2023.
Feature picture from Canva, chart from TradingView