Base Blockchain Experiences Rapid Inflow of Ether Ahead of Official Launch
Updated: Aug 10
Author Rosalia Mazza
Coinbase's layer-2 blockchain, Base, is attracting significant attention and a sizable amount of Ethereum (ETH), even though it's not officially open to the public yet. Over the past weekend, Base attracted more than $68 million in ETH and surpassed $200 million in trading volumes, outperforming more established networks like Arbitrum in terms of transactions.
This surge in interest and capital stems primarily from the astronomical performance of the meme coin BALD. Tradeable via the LeetSwap decentralized exchange (DEX) built on Base, BALD witnessed a surge of around 4,000,000% from its issuance to peak price, achieving more than $100 million traded within a 24-hour period.
On-chain data reveals that this frenzied activity resulted in over $68 million worth of Ether being bridged to Base within 48 hours, a significant increase from the daily inflows of $500,000 to $700,000 observed before the weekend. News of this surge spread rapidly across social media, attracting a multitude of traders eager for quick profits.
However, this sudden influx of capital and speculative trading has been accompanied by concerns. Opportunistic developers deployed hundreds of tokens, only to execute so-called "rug pulls" later. This phenomenon, combined with a lack of a functional two-way bridge, has led to some traders finding themselves unable to sell their purchased tokens on the open market.
The biggest losers in this scenario are those who purchased imitation tokens, as they cannot be sold on the open market. Furthermore, despite the impressive numbers, not all analysts are convinced about the future of the Base network. Mikolaj Zakrzowski, a Web3 analyst at on-chain analytics tool CryptoQuant, expressed doubts about Base's fundamentals.
Zakrzowski pointed out that a single address had bridged over $17 million worth of ether, suggesting the rise of the Base blockchain may not be broadly supported. "Most importantly, one address single-handedly bridged over $17 million worth of ether. It appears that the rise of Base blockchain is not supported by fundamentals,” Zakrzowski concluded.
In the face of this intense volatility, Jeff Mei, chief operating officer of crypto exchange BTSE, cautioned investors. "Meme coins are a hyper-speculative and volatile class of crypto tokens. Generally, these coins lack practical uses compared to more established tokens like ETH,” Mei warned.
Despite the rush to Base and the potential for high returns, it seems evident that these massive swings in valuation carry considerable risks. As the blockchain ecosystem waits for Base's official launch, caution and due diligence are critical for traders looking to participate in this new network.