- The Base blockchain faces criticism after promoting a token.
- Coinbase says Base didn't create the token.
Coinbase has distanced itself from a viral memecoin promoted by its affiliated Base blockchain on Wednesday after harsh criticism.
The token, which soared to a $17 million market value shortly after it launched, was created on Zora, a platform where users can turn social media posts into tradable tokens.
At 8:12pm UK time, the Base X account posted a picture with the words, “Base is for everyone.”
The post was quickly followed by another. “Coined it,” the account said, accompanied by a link to Zora where users could purchase a token based on the post.
“Base did not launch a token, this is not an official Base token, and Base did not sell this token,” a spokesperson for Coinbase told DL News. “Base posted on Zora, which automatically tokenises content.”
Creator fees
Base is a blockchain launched by Coinbase in 2023. It offers faster and cheaper transactions than Ethereum, and has generated some $120 million in revenue for the company.
So far, Base has earned $75,000 in creator fees from the token. Creators on Zora earn rewards from trading activity on tokens they create. Rewards are a percentage of the Ether spent from trading.
Users have long speculated that the Base could launch a token, as so many other similar blockchains have done. So when they saw the post from the official Base X account, they piled in.
Onchain records show a small number of users bought up large swathes of the token early on and later offloaded them at a substantial profit, crashing the token’s value 90% in minutes.
“This is deeply disappointing,” Suhail Kakar, a blockchain developer, said on X. “You knew the hype. You knew what would happen. And you knew people would get hurt.”
The token has since recovered and trades around the same value it did before the crash.
Many have branded the move as Base taking advantage of the hype surrounding memecoins — tokens based on viral social media posts or celebrities that trade mostly on their popularity.
Memecoins have faced heavy criticism in recent months because of their high volatility, similarity to gambling, and predatory practices of many who launch them.
Not a memecoin
Jesse Pollak, head of the Base blockchain and Coinbase’s crypto wallet, has defended Base’s move.
Pollak characterised the token not as a memecoin, but as a so-called content coin, because it represents a single piece of content and was created through Zora.
“Content coins are explicitly created in a context where it’s a repeat behavior. This is incredibly powerful and freeing, but it also should lead to a different valuation model,” he said.
“If you try to trade a content coin like a memecoin, you’re going to have a bad time.”
To be sure, there are those who don’t mind Base’s content coin experiment.
“Base launching tokens is fine,” Gabriel Shapiro, a crypto lawyer, said on X. “I actually think normalising just launching tokens for lulz is a service and crypto X is extremely inconsistent on the ‘ethics’ of this stuff.”
Yet many also say the firm should have known better. They argue that traders are treating the token as a vehicle for speculation — like a memecoin — and that framing it as a content coin is little more than a semantic difference.
“Normalise your literal mom and pops throwing money at every picture they see so maybe they can catch a viral one and make some money? Nah this ain’t it chief,” said Kirlulu, a pseudonymous blockchain developer.
“You’re not normalising onchain culture,” Kakar said. “You’re cheapening it.”
Tim Craig is DL News’ Edinburgh-based DeFi Correspondent. Reach out with tips at tim@dlnews.com.
