Memecoin BALD On Coinbase Layer-2 Faces Rug Pull Concerns As The Price Dropped Pver 80%

Key Points:

• Memecoin BALD experiences liquidity withdrawal on Coinbase’s Layer-2 Base, leading to an 80% price drop.
• Despite the setback, the memecoin gains attention and significant value, but investors are cautioned due to risks and lack of cross-chain bridge.

Investors in the memecoin BALD on Coinbase’s Layer-2 Base were met with a sudden liquidity withdrawal from the BALD/WETH pool on the evening of July 31. 

The move caused the token’s price to plummet by over 80%, leading many to label it as a rug pull. Interestingly, the person behind BALD gradually added liquidity back to the pool while still holding a significant amount of 12,000 ETH in private wallets. However, due to the lack of a cross-chain bridge back to Ethereum on Layer-2 Base, the dispersed funds proved challenging.

The token’s Twitter account added to the intrigue by posting a status that seemed to recall a famous quote from Do Kwon, just before LUNA-UST collapsed. Previously, on Sunday, July 30, the crypto community on Twitter was abuzz with BALD—a new memecoin created on Coinbase’s Layer-2 Base. BALD, which stands for “headless,” playfully targeted Coinbase CEO Brian Armstrong.

Despite being a newly created memecoin, the BALD/WETH pair on DEX LeetSwap experienced a staggering increase of over 30,000 times, currently ranking as the fifth-highest liquid swap pool on DEX Screener with $36.7 million. The estimated diluted capitalization for BALD stands at a respectable $70.3 million.

Prominent figures in the crypto community further fueled the FOMO sentiment by mentioning BALD on their Twitter accounts, drawing increased attention. However, potential investors need to exercise caution, given the significant risks associated with investing in such a new and volatile memecoin. Adding to the concern is the absence of an official cross-chain bridge solution from Ethereum on Base’s platform. 

An Twitter account issued a warning to the community about being cautious during money transfers, emphasizing that Base’s mainnet bridge only supports one-way transfers and does not yet facilitate withdrawals.

As the excitement and attention around BALD continue to grow, investors should remain vigilant and consider the risks associated with memecoins, especially those on newly launched platforms. The absence of a cross-chain bridge further underscores the need for careful evaluation before engaging in any transactions involving this token on Coinbase’s Layer-2 Base.

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

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