Coinbase-backed Layer-2 network Base is navigating turbulent waters following accusations stemming from a promoted crypto token that plummeted 95% shortly after its debut, only to partially recover.
The incident began on April 16 when Base utilized Zora, an on-chain social platform where posts automatically generate tokens. A Base post stating, “Base is for everyone,” was quickly amplified by the official Base X account, linking to the corresponding token page on Zora. This promotion fueled a rapid price surge, reaching a market capitalization of $17 million before crashing dramatically, erasing over $15 million in value almost instantly.
[pic.twitter.com/gq3lLLuXO1]
The precipitous drop ignited immediate criticism across social media, with users accusing Base and indirectly Coinbase of irresponsibly promoting a volatile memecoin. Allegations intensified as on-chain data suggested potential insider activity. Nearly half the token supply was reportedly held by insiders who sold off their holdings as Base’s promotion attracted buyers, contributing significantly to the crash.
Blockchain analysis firm Lookonchain highlighted suspicious transactions, identifying three wallets that acquired substantial amounts of the token just before Base’s promotional post and subsequently sold for profits exceeding $666,000.
[pic.twitter.com/1lrSydphxP]
In response to the growing backlash, Base issued a statement clarifying the token’s nature. The project asserted that the token was not an official Base or Coinbase network asset but rather part of a public experiment using Zora to explore bringing content on-chain. They emphasized a commitment to experimenting openly with tools for sharing memes and culture, stating they aim to support on-chain creativity.
“If we want the future to be onchain, we have to be willing to experiment in public,” Base communicated, adding that the project “will never sell these tokens.” This reflects a growing trend where blockchain platforms explore new engagement methods, though not without risks.
[pic.twitter.com/1lrSydphxP]
Despite the explanation, segments of the crypto community felt the initial promotion was misleading and lacked sufficient clarity regarding the token’s experimental status. The incident underscores the potential pitfalls when established platforms engage with memetic tokens, even experimentally, blurring the lines of endorsement and highlighting the need for cautious communication, especially after events like the Media Network token crash following a delisting.
Base continues its exploration of “contentcoins,” but the event has left many traders wary, reinforcing calls for greater platform accountability. As of the latest reports, the “Base is for everyone” token holds a market cap around $13 million with $37 million in 24-hour trading volume, according to its Zora page. The token’s creator has reportedly earned over $74,000 through trading fees and platform rewards.