Base, a layer-2 blockchain sponsored by Coinbase, has already attracted millions of dollars’ worth of Ethereum (ETH) before it has even officially launched.
More transactions and more than $200 million in trade volume occurred over the weekend on Base, surpassing even the level seen on more established networks like Arbitrum.
Even though the blockchain is not yet available to the general public, investors have flocked to it in the hopes of making a killing, especially with meme coins.
For example, on-chain data shows that in the 48 hours following the meme coin BALD’s meteoric rise, almost $68 million worth of Ether was bridged to Base.
Inflows averaged between $500,000 and $700,000 every day leading up to the weekend.
The value of BALD, a cryptocurrency that can be traded on the LeetSwap decentralized exchange (DEX) on Base, increased by a factor of around 4,000,000% between the time it was first issued and its all-time high.
Over $100 million changed hands in less than a day.
The story circulated rapidly through social media, drawing in a large number of investors hoping to make a quick buck.
However, since its peak, the token’s value has plummeted, falling by more than 78%.
On Monday, a developer doing a rug pull on the Ethereum layer-2 network Base, home to the BALD joke coin, caused a precipitous decline in the value of the cryptocurrency.
Even though businesspeople still flocked to Base despite the lack of a working two-way bridge, the situation bred exploitation.
Despite initial gains of thousands of percent, tokens like brian (BRIAN), toshi (TOSHI), and basedbot (BOT) have since plummeted, leaving investors with poor returns and few avenues for selling their tokens.
In addition, some developers have used this opportunity to their advantage by deploying hundreds of tokens only to withdraw rug operations later.
Several customers learned the hard way that they had been duped into buying worthless fake tokens.
However, some investors think that token holders are driving this influx of capital into Base because they are desperate to make a profit from the market’s current state of inertia.
To paraphrase the COO of a cryptocurrency exchange, “every investor has their own risk appetite, and these swings in volatility do offer excellent opportunities to lock in profits as well,” Jeff Mei recently noted in an interview.
However, Mei stressed the necessity of not being swept up in the enthusiasm, as meme currencies are highly speculative.
Despite all the excitement, not everyone is confident in Base’s future.
Web3 analyst at on-chain analytics tool CryptoQuant Mikolaj Zakrzowski has expressed skepticism regarding blockchain’s underlying principles.
Zakrzowski observed that one address linked more than $17 million worth of ether, suggesting that Base’s ascent may not be firmly based on strong foundations.
In July, developers were able to use the live version of OP Stack’s Base platform to try out applications and blockchain-based products.