BALD, a token launched on Coinbase’s Layer 2 network Base, lost 90% of its value after hitting a peak market capitalization of $85 million on July 31.
Blockchain users pointed out that the token’s creator had removed most of its liquidity from decentralized exchange (DEX) LeetSwap, where BALD was actively traded between Sunday and Monday.
— The Data Nerd (@OnchainDataNerd) July 31, 2023
$BALD deployer just pulled the last 370 ETH of its liquidity and hard rugged now
80m in mcap gone in under an hour
The Wild West of Crypto pic.twitter.com/zCaHAagIxm
— notEezzy 🧸 (@notEezzy) July 31, 2023
“I didn’t sell a single token at any point since deployment. Just added/removed 2 sided liquidity and bought,” the pseudonymous developer behind the token said on Twitter.
One user pointed out that by adding two-sided liquidity when the price goes up, the automated market maker is selling tokens in exchange for ETH in the pool, which is, in effect, the same thing as selling tokens. The BALD contract deployer noted that this assertion was “correct,” a response that bore an uncanny resemblance to those made by former FTX CEO Sam Bankman-Fried in the past.
— icebergy ❄️ (@icebergy_) July 31, 2023
Now, some Twitter conspiracy theorists are all but certain that the person behind the BALD rug pull is an Alameda executive, if not Bankman-Fried himself. Twitter user “@MidasFoolsGold” traced the BASE deployer’s on-chain activity, revealing a curious series of transfers made by the wallet in question.
Midas found that not only was the wallet originally funded from FTX, but it made deposits to the crypto exchange when it was an established fact that no one could get their funds out. Further, all wallet activity came to a standstill during the time that Bankman-Fried was in jail in the Bahamas.
Analysis by crypto trader “@thiccythot_” estimated that the BALD deployer made a profit of around $5.2 million, after removing nearly $20 million worth of liquidity.
this seems like clearly malicious behavior given the timing of the bids and LP removes
how much did the deployer make?
the deployer added 6,870ETH, spent 1,360ETH buying at an average price of 0.0004, and withdrew 10,704 ETH
Net profit: 2,789 ETH or $5.2 million dollars
— thiccy (@thiccythot_) July 31, 2023
Coinbase launched the Base mainnet for developers on July 14, inviting early builders to deploy their projects but hold off on revealing user-facing applications until the network opens to the public in early August, which is also when a publicly available user interface to bridge ETH to the network will likely be made available.
Even so, market participants have bridged ETH to Base to buy up tokens on the network, which has quickly become a hub for trading obscure meme coins.
According to on-chain insights platform Scopescan, a single wallet address, known to be a “series rug-puller” on chains like Binance Smart Chain and Arbitrum, has deployed 29 meme coins to Base and rugged every single one of them.