Base (L2) Network Faces Backlash After Promoting a Rug-Pull Memecoin That Crashed 90%

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Coinbase’s Layer-2 (L2) Network, Base, has faced criticism from the crypto community after it was involved in an unofficial memecoin rug-pull that saw the token crash by over 90%.

The incident began when Base’s official X (formerly Twitter) account posted an image with the text “Base is for everyone.” Shortly after, they shared a link to the on-chain social protocol Zora and the caption “Coined it.”

The protocol allows users to make social media posts into tradable tokens, automatically minting them. After Base’s post was turned into a token, the crypto community quickly drove up its market capitalization to $17 million.

However, online reports showed that the memecoin collapsed by around 92% after the top holders, who had 47% of the supply, sold the memecoin a little over an hour after launching.

“The token got HORRIFICALLY sniped. A bunch of the top holders (who have no presence on X) ganged up and sold the token after an hour of launching, taking it from $1.6 to $0.16,” one user wrote.

On-chain data analytics platform Lookonchain added that “3 wallets bought a large amount of ‘Base is for everyone’ before Base posted and sold them, making a profit of ~666K.”

Following the incident, members of the crypto community took to X to slam the network’s team for the memecoin and asked them to “stop launching worthless tokens that will all inevitably go to 0. You are diluting your brand and the value of real base assets.”

Zora data shows Base has earned around $81,000 from the memecoin, which has recovered from the initial sell-off with a peak market capitalization of $26 million before retracing to the $9 million-$10 million range.

In response to the backlash, Base clarified that they will never sell their holdings, but they weren’t an official network token either. The team explained that they posted on Zora because they believe everyone should bring content on-chain and use the tools that make it possible.

Memes. Moments. Culture. If we want the future to be onchain, we have to be willing to experiment in public. That’s what we’re doing. 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 onchain.

The public on-chain experimentation brought up a discussion about memecoin culture and on-chain content, with Base's creator, Jesse Pollak, making a distinction between a contentcoin and a memecoin in a series of X posts.

According to his post, a contentcoin is one piece of content with singular value and no expectations. Additionally, multiple of them can be made by the same person, with “big ones” potentially turning into memes.

On the contrary, a memecoin is an “aggregation of content,” with aggregated value and high expectations, where the creator “should” only create one. He also noted that big ones turn into projects.

Pollak considers that “someone has to normalize putting all of our content onchain. and i’m not afraid for it to be us. why? because in the wake of the chaos, we’ll normalize the behavior and create a better future for creators.”

Despite this, many users remain skeptical, with community members also criticizing Base’s post announcing investors can mint a deleted scene of the “Vitalik: An Ethereum Story” documentary, where the project’s founder, Vitalik Buterin, shows what’s in his backpack.

“Through ‘the financialization of everything’ we come to learn that most things are worthless,” the user stated.