The current hype enveloping BaldBaseBald (BALD), a meme coin inspired by Coinbase CEO Brian Armstrong, led to the introduction of 29 meme coins over the weekend on Base, according to scope data from July 31.
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Don’t get carried away by the hype, that’s what they want. pic.twitter.com/NfslC2vyV0
— MYSTERY NETWORK (@IndeedaMystery) August 1, 2023
All 29 meme coins, however, have since been strong, and the deployer, who had planted about $105,000 of ETH as liquidity, left with over $1 million. Based on Optimism roll-up technology, Base is an Ethereum layer-2 platform.
Rug Pulls On Base
The meme coin, BALD, generated excitement on July 29 and 30, when its values soared by as much as 4,000X, increasing the token’s market valuation to over $100 million. It was fantastic news for those who made an early investment because some people profited by exiting as the wave rose.
🚨 Crypto scams exist in all industries, including the crypto world
Users are shocked due to multiple #Base projects showing signs of scams like liquidity withdrawal and slow rug pulls
— Base Station🛡️ (@BaseStationCS) August 1, 2023
While Scope points out that the address behind the 29 meme coins has a history of rug-pulling on other platforms, such as the BNB Chain and Arbitrum, a well-known Ethereum layer-2 platform, BALD has already been prey to this. Due to the decentralized nature of trading, community-provided liquidity is crucial on platforms where meme currencies are exchanged.
The liquidity that rug pullers often provide to their meme coins draws more people to purchase the currency, increasing liquidity as prices climb. However, at this point, the creator purposely withdraws liquidity by switching his meme currencies to a more liquid coin like Ethereum, resulting in a reduction in the value of their tokens to zero.
Meme Coins Are Volatile
Meme coins are well-liked in the cryptocurrency world, particularly on Ethereum, where they are produced in the billions as fungible ERC-20 tokens. Elon Musk-endorsed Dogecoin is the most liquid and well-known cryptocurrency.
Are you thinking about investing in #meme coins?
➤Think again! The $BALD crypto #scam is a reminder that these coins are often highly volatile and can be easily manipulated by scammers. Just look at picture below, investors got rekt.
➤Already warned you all about this… pic.twitter.com/Rotvn0H6HS
— Gkumar Gaming (@GamingGkumar) July 31, 2023
Although they are becoming more popular, there are worries about their volatility and lack of usefulness. Some critics have even directed to them as “casinos” that undercut the real purpose of cryptocurrencies as an alternative financial system.