Coinbase’s Ethereum Layer 2 (L2) chain, Base, has faced critism for its content-tokenization initiative after its first auto-converted ERC‑20 token on Zora pumped and dumped.
On April 16, Base’s simple “Base is for everyone” post on Zora was auto-converted into an ERC‑20 token.
Within minutes, speculative fervor drove the token’s market capitalization to over $17 million, only to see it collapse by approximately 95%, wiping out more than $15 million in value in a classic liquidity trap.
In the hours following the crash, the token exhibited a remarkable recovery, rallying above $0.021 before slightly pulling back to around $0.011 against Wrapped Ethereum (WETH) at press time on Uniswap.
The rapid descent fueled harsh criticism, particularly on X, where users accused Base and its parent company Coinbase of irresponsibly endorsing what many perceived as a pump‑and‑dump scheme.
Volume bots involved
On-chain analysis by Lookonchain revealed three wallets amassed significant positions ahead of Base’s official post and offloaded them shortly after, seizing roughly $666,000 in profits.
3 wallets bought a large amount of “Base is for everyone” before @base posted and sold them, making a profit of ~$666K.
0x0992 spent 1.5 $ETH($2,370) to buy 256.39M “Base is for everyone”, and sold all for 108 $ETH($170.4K), making $168K.
gmgn.ai/base/address/l…
0x5D9D spent 1
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In addition, data from DEXScreener revealed that volume bots contributed to the token’s meteoric rise and equally rapid fall, intensifying losses for unwary retail investors.
Base denies affiliation to the memecoin
Base issued a statement clarifying that it did not create or directly endorse the token, noting it was automatically minted by Zora’s protocol and explicitly disclaiming any official affiliation.
Base is posting on Zora because we believe everyone should bring their content onchain, 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,
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The Zora token page itself warned purchasers that the token carried a high risk of loss and was intended solely for creative experimentation rather than investment returns.
Despite these disclaimers, many community members lamented that Base’s public posts lacked sufficient upfront communication to protect traders from extreme volatility.
AP Collective CEO Abhishek Pawa criticized the rollout as “disastrous,” arguing that the misalignment between innovation and responsible execution undermined trust in on-chain content experiments.
Alon, co-founder of Pump.fun, echoed concerns that tokenizing social posts without clear guardrails could inflict real harm and erode confidence in emerging contentcoin models.
I think there’s a reality where what base did is normal in a few years’ time
but it DEFINITELY isn’t today and that has resulted in hurt
I’m a huge advocate for the vision of “tokenizing everything” but you can’t change current market realities – if you launch a coin AND have
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However, Jesse Pollak, a creator on Base, defended the initiative as a necessary step toward normalizing on-chain content creation, likening tokens to the content they represent in a novel marketing paradigm.
Pollak highlighted that Base could retain 10 million of the one billion tokens as creator rewards but pledged never to sell them, with generated fees earmarked for developer grants.
In the wake of the incident, Base announced a second drop, “we coined our FarCon poster on zora,” before going ahead to drop the third, underscoring its commitment to the contentcoin vision.
However, skeptics remain unconvinced, pointing out that novelty alone cannot justify exposing participants to unchecked market swings.
The episode has sparked broader conversations about the responsibilities that influential Web3 projects hold when experimenting with token-based innovations.
Social media sentiment analysis shows a prevailing tone of frustration, with many users calling for standardized disclaimers and real-time risk alerts.
Some veteran crypto influencers proposed creating industry guidelines for contentcoin drops, advocating for transparency in token distribution and owner control.
Meanwhile, Base continues to update its community via X threads, sharing lessons learned and operational metrics from the experiment.
The Base team has emphasized that on-chain content tokenization is a long-term play aimed at fostering deeper engagement and revenue possibilities for creators.
Critics, however, insist that experiments must be structured to minimize downside for retail participants, or risk alienating the very audience they seek to engage.
As the dust settles, Base’s experiment remains a cautionary tale of how rapidly emergent tokens can enthrall and then devastate traders without proper oversight.
Proponents argue that every public experiment generates invaluable data that will refine the future of on-chain content monetization.
However, Base must balance its pioneering ambitions with the imperative to demonstrate responsible stewardship over token-based experiments.
In coming weeks, industry bodies may propose voluntary best practices for on-chain token experiments to safeguard both innovation and investor interests.
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