Crypto Wallets Profit $666,000 From Early Base Token Acquisition
1min read Three crypto wallets managed to acquire "Base is for everyone" tokens before the official announcement by Coinbase's Ethereum Layer 2 solution, Base. This strategic move allowed them to profit significantly, totaling approximately $666,000. The tokens were minted via Zora, an on-chain social network that transforms any content posted on its platform into tradable coins, empowering creativity and content monetization.
At around 19:30 UTC on Wednesday, Base announced the debut of its token. The token quickly rose to a market capitalization of over $15 million, bringing substantial gains to at least three crypto addresses that had acquired coins before the official announcement. These wallets, identified as 0x0992, 0x5D9D, and 0xBD31, made profits of $168,000, $266,000, and $231,800 respectively, by buying and selling the tokens within a short period.
However, the token's market capitalization plummeted to less than $2 million shortly after the announcement as Base introduced another coin for its FarCon poster. This new coin sucked out liquidity from the "Base is for everyone" token, leaving many investors with significant losses. Despite this initial downturn, the market capitalization of the "Base is for everyone" token has since recovered, topping the $18 million mark.
Coinbase clarified that the "Base is for everyone" coin is not the official cryptocurrency of Base and that the layer 2 did not directly sell these tokens. "Base posted on Zora, which automatically tokenizes content," a spokesperson for Coinbase stated. The legal disclaimer on Zora and Base's clarification on X both emphasized that Base will never sell these tokens, and they are not official network tokens for Base, Coinbase, or any related product.
The rapid boom-bust cycles in these smaller tokens often create a net negative wealth effect, allowing a select few to profit significantly while the majority face losses. This dynamic can lead to liquidity drain from the broader digital assets market. The larger the boom-and-bust cycles associated with these coins, the stronger the negative wealth effect becomes. For instance, the debut of LIBRA and TRUMP tokens this year destroyed millions in investor wealth, marking a major price top in bitcoin and the broader crypto market.
