Coinbase’s Layer-2 (L2) Network, Base, recently came under fire amidst rug-pull allegations following its promotion of an unofficial memecoin that experienced a significant crash, shedding light on the ongoing debate surrounding the future of memecoins and on-chain content.
The controversy began when Base’s official X account posted an image with the caption “Base is for everyone,” followed by a link to the on-chain social protocol Zora, with the message “Coined it.” This led to a surge of speculation among investors, with the protocol enabling users to turn social media posts into tradable tokens automatically. The memecoin derived from Base’s post quickly amassed a market capitalization of $17 million.
However, reports emerged indicating that the memecoin plummeted by approximately 92% after the top holders, who owned 47% of the supply, swiftly sold off their tokens within an hour of the launch. Community members expressed outrage, labeling the incident as a rug pull and urging the network’s team to refrain from launching tokens that hold little to no value, thus diluting the brand and the credibility of genuine base assets.
Despite the negative backlash, Base managed to generate around $81,000 from the memecoin. The token’s market capitalization initially peaked at $26 million before settling in the range of $9 million to $10 million.
In response to the criticism, Base clarified that they would not sell their holdings and emphasized that the unofficial memecoin was not an official network token. The team defended their actions by stating that they believe in bringing content on-chain and utilizing the tools that make it possible.
This public on-chain experiment sparked a broader discussion on memecoin culture and the role of on-chain content. Base creator, Jesse Pollak, delved into the nuances between contentcoins and memecoins, highlighting the distinctions in their value and expectations.
Pollak advocated for normalizing the transition of all content onto the blockchain, asserting that through experimentation, creators can pave the way for a better future. However, skeptics remain wary, with some users criticizing Base’s decision to allow investors to mint a deleted scene from the “Vitalik: An Ethereum Story” documentary, questioning the underlying value of such initiatives.
As the debate surrounding on-chain content and memecoins continues to unfold, it remains evident that the cryptocurrency space is evolving rapidly, with new challenges and opportunities emerging for creators and investors alike.
In conclusion, Base’s foray into the world of memecoins serves as a cautionary tale, highlighting the importance of transparency, integrity, and responsibility in the ever-evolving landscape of decentralized finance. As the industry continues to mature, it is crucial for all stakeholders to exercise caution and diligence to ensure the long-term sustainability and credibility of the ecosystem.