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Just one day after a flurry of activity on its highly anticipated Ethereum layer-2 network, and it looks like scammers used the freshly minted Bald token to target Coinbase’s latest product.
Base, which America’s biggest cryptocurrency exchange hopes will be a new ecosystem for crypto projects, launched earlier this month.
Traders yesterday rushed to buy new tokens running on the network using decentralized exchange LeetSwap.
But today, it looks like one of the new tokens—Bald, which dropped yesterday—was a rug pull after the token’s deployer removed $25.6 millions of dollars in liquidity.
They happen when a developer launches a new token and makes it seem as though the project is legit and then removes the liquidity and disappears.
Bald, a meme coin poking fun at Coinbase CEO Brian Armstrong’s lack of hair, today plunged in value by 92%, according to CoinGecko data.
The token has exploded in price by over 3,000% in a day after its launch. The Onchain Intrigue Telegram Channel tracked the wallet after pulling liquidity.
It revealed that the wallet went on to buy more Bald to add some liquidity, sent a bizarre tweet seemingly tricking more users to buy the token, and then removed all the liquidity again.
— Bald (@BaldBaseBald) July 31, 2023
The same account has since denied accusations of having sold tokens, claiming to have "added/removed 2 sided liquidity and bought." The user then agreed with someone who replied to the tweet pointing out that token had, in fact, been sold.
Matt Aaron, project lead at Cielo, which runs Onchain Intrigue, told Decrypt that the situation was “puzzling” because the wallet moving the funds was a “sophisticated whale” holding large amounts of cbETH, Coinbase's Ethereum liquid staking token. Liquid staking tokens can be bought, sold, and swapped for other assets. The cbETH can also be redeemed for the Ethereum that was staked to mint it.
“Allegedly this same wallet has KYC’d [know-your-customer] their wallet on a centralized exchange,” he said.
Editor's Note: Story has been updated to clarify that the user moving funds from the Bald project holds cbETH, but hasn't necessarily staked Ethereum through Coinbase.