At least three wallets made significant profits by purchasing tokens before Base officially announced its launch on X.
Token debuts have been a controversial topic, often criticized for their poor execution that enables individuals, reportedly armed with insider knowledge of impending launches, to profit by engaging in front-running activities.
The most recent case involves the “Base is for everyone” token, which was launched by Coinbase’s Ethereum Layer 2 solution, Base, on Wednesday. According to blockchain tracking service Lookonchain, three crypto wallets acquired tokens ahead of the official announcement on X, netting substantial gains.
At approximately 19:30 UTC on Wednesday, Base revealed the introduction of its token, minted on Zora, an on-chain social network that transforms any content posted on its platform into tradable coins. The token’s market capitalization swiftly rose to over $15 million, bringing significant profits to at least three crypto addresses that had already purchased coins before the official announcement on X.
“Three wallets bought large amounts of ‘Base is for everyone’ before @base posted and sold them, making a profit of ~$666K,” Lookonchain tweeted.
Wallet address 0x0992 invested 1.5 ether (ETH) to purchase 256.39 million tokens at 12:30 PM UTC and sold the entire amount for 108 ETH after the official announcement, pocketing a profit of $168,000 in just over an hour. Wallet address 0x5D9D spent 1 ETH ($1,580) and made a profit of $266,000, while another address, 0xBD31, earned $231,800.
Following this, the token’s market capitalization plummeted to below $2 million as Base introduced a new coin for its FarCon poster, draining liquidity from the “Base is for Everyone” token and leaving some investors with significant losses.
However, the valuations have since recovered, with the market capitalization of “Base is for Everyone” reaching over $18 million, according to data from DEX Screener. Base creator Jesse commented, emphasizing that the aim was to “normalize putting all content on-chain.”
Coinbase clarified that the “Base is for Everyone” token is not the official cryptocurrency of Base, and that the Layer 2 platform did not directly sell these tokens. “Base posted on Zora, which automatically tokenizes content,” a Coinbase spokesperson explained to CoinDesk.
A legal disclaimer on Zora and a statement from Base on X both indicated that Base would not be selling these tokens. “To be clear, Base will never sell these tokens, and these are not official network tokens for Base, Coinbase, or any other related product. The content we share is creative, and we’re going to keep bringing culture on-chain,” Base affirmed.
The rapid boom-and-bust cycles of these smaller tokens often lead to a negative wealth effect, benefiting a select few while resulting in significant losses for the majority. This dynamic typically drains liquidity from the broader digital asset market.
The larger these boom-and-bust cycles become, the more pronounced the negative wealth effect. For instance, the debut of LIBRA and TRUMP tokens earlier this year led to the destruction of millions in investor wealth, coinciding with a major price peak in Bitcoin and the broader crypto market.
