A new memecoin called BALD, which was recently launched on Coinbase’s Base network, experienced a devastating 85% decline in value. Reports from social media and blockchain data suggest that the developer of BALD decided to withdraw 1,034 Ether, equivalent to approximately $1.9 million, from the market. This sudden move resulted in the coin’s price plummeting to nearly zero.
Controversy Surrounding Developer Actions
The developer of BALD, known only as “Bald” on Twitter, denied engaging in any market sales of the coin. Instead, the developer claimed to have simply added or removed two-sided liquidity and made personal purchases. However, adding liquidity is seen by some as equivalent to selling tokens. When confronted about this, the developer acknowledged that adding liquidity does involve selling tokens.
Early Returns and Risks
Coinbase’s Base network was launched on July 13 with the intention of providing a platform for builders. However, its development team warned regular users against utilizing the network due to the absence of a functional user interface (UI) for its bridge. Although the team plans to officially release the network to users in August along with a bridge UI, some investors have taken risks by purchasing assets on the network prior to its official launch. These investors have used development tools to bridge Ethereum (ETH) to Base without a UI, hoping for early returns.
Questionable Liquidity Withdrawal
The BALD token gained significant attention within the first 14 hours of trading, experiencing an astonishing 289,000% increase in value. However, on July 31, reports emerged on Twitter stating that the developer’s account had withdrawn 1,034 ETH in liquidity. Consequently, the price of the token quickly collapsed, almost reaching zero.
Concerns over Failed Memecoin Launches
The recent debacle with the BALD token is just one of many instances where investors have suffered significant losses due to failed memecoin launches. A prime example is the launch of Pond0x, which resulted in over $2 million being lost. This particular launch was marred by a faulty transfer function that allowed unauthorized token transfers.
While the world of memecoins can be entertaining and profitable for some, it is crucial to approach these investments with caution. The lack of regulation and transparency in this space exposes investors to considerable risks. As the cryptocurrency market continues to evolve, it is imperative for investors to conduct thorough research and exercise due diligence before diving into any meme-based investment opportunities.