Coinbase-Backed Base Faces Blowback Over Content Coin Promo and 90% Crash

Content Tokenization Sparks Suspicion of Insider Trading and Market Manipulation

Base, the Ethereum Layer-2 network incubated by Coinbase, is facing a firestorm of criticism following the promotion of a so-called “content coin” that many now argue resembled a textbook pump-and-dump scheme. On April 16, Base’s official X account posted a message reading “Base is for everyone,” linking to a tokenized version of the post on Zora, a decentralized platform where content can be minted and traded as crypto tokens. 

While the message appeared innocuous, market participants interpreted the post as a tacit endorsement, sparking a rapid influx of speculation that propelled the coin’s market cap to $17.1 million within hours.

The euphoric rally proved short-lived. The token cratered by nearly 90%, plunging to a low of $1.9 million before rebounding to just over $7 million. That initial volatility didn’t just result in investor losses—it ignited intense backlash from traders, founders, and VCs who questioned the integrity of the launch. Trading activity peaked at over $35 million in volume, and Base reportedly pocketed more than $74,000 in transaction fees from the frenzy, raising further questions about the incentives behind the post.

Blockchain analysts from Lookonchain identified highly suspicious behavior among three Ethereum wallets that acquired large quantities of the token prior to the Base post. These wallets collectively spent under $6,000 worth of ETH but walked away with profits exceeding $666,000. One wallet in particular drew attention for purchasing 21% of the token’s entire supply with just 2 ETH, later flipping the position for more than $300,000. The absence of pre-launch protections triggered concerns of insider trading or sophisticated sniping strategies capitalizing on privileged information.

Critics across the crypto space were quick to react. Abhishek Pawa, founder of AP Collective, condemned the rollout, stating, “Execution was the disaster here, not the idea: no clear upfront communication, traders left confused, expectations completely misaligned.” Beanie, a VC at GM Capital, added fuel to the fire with a tweet that read, “Coinbase, fresh off the SEC dropping its case against it, decides to boldly parlay that W into launching its own Base token from the official account. Naturally, it immediately rugged it.”

Zora attempted to distance itself from the fallout, displaying a disclaimer that labeled the token and others on its platform as collectibles for “artistic and cultural purposes,” not investments or financial instruments. Still, the platform’s messaging did little to stem criticism from those who believed the format created a façade of legitimacy. Base received 10 million tokens—1% of the total billion-token supply—as the creator, and stated it would never sell them. Instead, it said portions of transaction fees would go toward grants supporting builders in the Base ecosystem.

Jesse Pollak, the lead developer behind Base, took to X to clarify the network’s intentions. He described contentcoin as a conceptual tool in Base’s broader strategy to bring creative expression fully on-chain, where creators can earn directly from their content. According to Pollak, Base had been experimenting with similar tokenized posts for over two months. “Why coin all of our content?” he wrote. “Because it’s the end game for how we can build a new economy where creators earn from their creativity.” Pollak emphasized the coin wasn’t a financial asset, writing, “The coin is the content and the content is the coin — no more, no less.”

Still, the idea of divorcing speculative value from crypto tokens remains aspirational. Pollak cautioned that using typical valuation metrics borrowed from meme or project coins would lead to misguided expectations. But Alon, co-founder of Pump.fun, wasn’t convinced. “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 social influence, that comes with responsibility,” he warned.

Fueling the distrust were revelations that just three wallets held nearly half—47%—of the token’s supply. Such a concentration of ownership has long been flagged as a risk indicator for schemes designed to enrich early holders at the expense of latecomers. Despite the controversy, Base pushed ahead with another contentcoin tied to its appearance at the FARCON conference in New York City, which has already surpassed $2 million in trading volume.

The incident has left the crypto community divided. While some applaud Base for exploring new models of on-chain content monetization, others view the move as a reckless use of platform influence that exposed retail traders to unnecessary risk. 

This article has been refined and enhanced by ChatGPT.