Contents
- The base serves as a breeding ground for exploiters
- Personal Risk Appetite
- Unveiling Concerns
Before its formal debut, Coinbase-backed layer-2 blockchain Base has garnered millions of dollars in Ethereum (ETH).
Over the weekend, Base saw more than $200 million in trade volume more transactions than major networks such as Arbitrum.
Despite the fact that it is not yet available to the general public, traders have rushed to the blockchain in the hopes of reaping big gains, notably from meme currencies.
According to on-chain statistics, during the increase in meme currency BALD, almost $68 million in Ether was bridged to Base in less than 48 hours.
Prior to the weekend, daily inflows were between $500,000 and $700,000.
BALD, which is traded on Base through the LeetSwap decentralized exchange (DEX), witnessed a tremendous increase, soaring by almost 4,000,000% from its first issue to its highest price.
Within 24 hours, it had a trading volume of more than $100 million.
This news soon circulated on social media, bringing a large number of traders eager to take advantage of the potential for fast gains.
However, the token has subsequently taken a beating, falling by more than 78% from its all-time high.
On Monday, a developer withdrew all of the liquidity out of the BALD meme currency on Ethereum layer-2 network Base, an act known in crypto as rug pull.
The base serves as a breeding ground for exploiters.
While the absence of a working two-way bridge did not discourage merchants from coming to Base, it did create an environment conducive to exploitative behaviors.
Certain tokens, such as brian (BRIAN), toshi (TOSHI), and basedbot (BOT), which originally soared by hundreds of percentage points, have now plummeted dramatically, leaving followers with limited profits and trying to find exit liquidity.
Furthermore, opportunistic developers have taken advantage of the circumstance by deploying hundreds of tokens just to pull the rug later.
Several individuals learned that they had inadvertently acquired counterfeit tokens that could not be traded on the open market.
Some traders feel that the surge of cash into Base is the result of token holders looking for methods to earn money in an otherwise stagnant market.
Personal Risk Appetite
Each investor has their own risk appetite, and these swings in volatility do offer excellent opportunities to lock in profits as well," said Jeff Mei, chief operating officer of cryptocurrency exchange BTSE .
Mei, on the other hand, warned against the hyper-speculative character of meme currencies and stressed the need of avoiding getting caught up in the excitement.
Despite the enthusiasm, not everyone is persuaded of Base's long-term potential.
Mikolaj Zakrzowski, a Web3 analyst at on-chain analytics tool CryptoQuant, questioned the blockchain's foundations.
Unveiling Concerns
According to Zakrzowski, one address alone crossed over $17 million in ether, demonstrating that Base's ascent may not be wholly underpinned by strong roots.
Base, which is built on OP Stack, became online in July for developers to test apps and blockchain-based solutions.
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