Coinbase-backed Base under scrutiny as ContentCoin loses millions in market value

Ethereum layer-2 network Base is at the center of a controversy after it appeared to have promoted a pump-and-dump memecoin. The Coinbase-backed project posted a promotional image with the tagline “Base is for everyone” on X and shared the link to a token by the same name on Zora.

Its action led to massive interest in the token as investors milled in, causing its market cap to surge massively to $17.1 million. However, the surge did not last long, as the token crashed by almost 90% and dropped to $1.9 million.

Although the token has rebounded and is trading above a $9 million market cap, the incident has sparked criticism of Base. Many crypto community members described it as bad publicity for the industry and Coinbase itself.

According to Pierre Rochard, the CEO of the Bitcoin Bond Company, this is terrible for the industry as it only extracts value in the short term. Beanie, a venture capitalist at GM Capital, also criticized Coinbase for the idea.

He wrote:

“Coinbase fresh off the SEC dropping its case against it, decides to boldly parlay that W into launching it’s own Base token from the official account. Naturally, it immediately rugged it.”

However, some people believe that the idea was good and Base only executed it wrongly. AP Collective founder Abhishek Pawa believes the idea had potential, but Base fumbled the execution.

He said:

“execution was the disaster here, not the idea: no clear upfront communication, traders left confused, expectations completely misaligned.”

Still, the general consensus among crypto users has been that Base should not have promoted the token.

Base defends its position

However, Base has denied the allegations of promoting a memecoin, noting that it is not an official token but only a contentcoin created because of its post on Zora. Zora is a social network that automatically tokenizes any content posted on it.

Interestingly, the disclaimer page for the token on Zora states that the coin and all other coins are not official Base tokens and are only meant for creative and artistic purposes as collectibles, similar to its post on X.

It said:

“This and future coins on Zora are not an official network or protocol token for Base, Coinbase, or any other related product. They are created solely for artistic and cultural purposes as collectibles, not as investments or financial instruments.”

The post added that Base will get 10 million tokens out of the total 1 billion supply as the creator and will never sell the tokens. A percentage of the token’s fees also goes to the creator, and Base is setting it aside for grants that support builders on the network. So far, the token trading volume is over $35 million, with Base earning more than $74,000 in fees.

Base creator Jesse Pollack also defended the content coin, noting that putting all content on-chain is part of the long-term goal of Base, and this would be beneficial to creators in the long term

He said:

“Why coin all of our content? because it’s the end game for how we can build a new economy where creators earn from their creativity.”

Pollack himself has been creating content coins on Zora for over two months now while promoting it as the next big thing to have all content on-chain. However, there are those who believe this is just another attempt to redefine memecoins.

Meanwhile, Base is still posting on Zora and creating contentcoins with its post. Its latest post is about an appearance at the FARCON, an event in New York City, and the token already has over $2 million in trading volume.

Three wallets make over $600k in profits from the Base token

While controversy continues around the Base contentcoin, some users profited from the token. According to Lookonchain, three Ethereum wallets bought the token before Base posted it on X and made a combined $666,000 profit from their sales after spending less than $6,000 worth of ETH.

Although many believe that these could be insiders, it is also likely that they sniped the supply right at launch because it did not have snipe protection. Pop Punk on X noted that two wallets bought 21% of the token supply for 2 ETH and sold it for over $300,000 in profit.

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