Base’s Unofficial Token Sparks Market Frenzy, Crashes 92% in Hours

• Base’s social post became a token, skyrocketing to $13M before plunging 92% in hours.
• Critics raise concerns over token distribution while trading volume hits $28 million.

Coinbase’s Layer 2 network Base inadvertentlyunintentionally sparked a cryptocurrency trading frenzy yesterday.  Its social media post automatically converted into a tradable token through Zora’s on-chain social protocol. 

The “Base is for Everyone” token, launched from Base’s official X account, made headlines by skyrocketing to a remarkable $13 million in valuation. However, it swiftly corrected, dropping 92% to a valuation of just $1 million within three hours.

Coinbase Layer 2 Network’s X Post Creates Unexpected Trading Turmoil

Despite clear disclaimers stating it was “not an investment” and created solely as a digital collectible, traders rapidly bought into the unofficial token. This incident happened after Base announced they had “coined it” on Zora yesterday afternoon. The asset has since recovered slightly, rising 20% to $0.007 according to DEXScreener data.

Base said, “Base is posting on Zora because we believe everyone should bring their content onchain” to defend their activities on X. The future of on-chain operations requires public experimentation from everyone who wants this outcome. Zora offered a brief reply and said, “Study Zora.”

Critics, including Hantao Yuan, co-founder of the quest-to-earn platform Moku, raised concerns about the token’s distribution. Yuan documented that the top three holders controlled 47% of the supply, with one wallet alone holding 25.6% of the tokens. He claimed approximately 2,500 potentially new Base users were rugged in the process.

The incident took place when Zora implemented its feature, which transforms social content into ERC-20 tokens. Base obtained 10 million tokens, which is equivalent to 1% of the total supply, from the post creation on Zora, yet promised to keep these tokens in their possession permanently. The Base representative responded to this by stating that Base did not sell any tokens while stressing the disclaimer present on Zora’s webpage.

Jesse Pollak, Base’s founder, attempted to distinguish these content coins from traditional meme coins. He describes the former as representing “one piece of content” with “singular value” and “no expectations.” 

The incident has generated nearly $28 million in trading volume and over $60,000 in creator earnings for Base, according to on-chain data. The incident highlights both the potential and volatility of emerging crypto social token mechanisms.

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