The market is talking about the ‘rug-pull’ thing around BaldBaseBald (BALD), a meme-coin inspired by Coinbase CEO Brian Armstrong. The altcoin reached a market cap of one hundred million shortly after stepping into the market. However, it subsequently lost almost all of its value. So what actually happened?
How did a hundred million dollar altcoin become worthless overnight?
As you follow on Kriptokoin.com, a meme-coin named BaldBaseBald (BALD) was launched on the Base Network, Coinbase’s new Layer-2, built on Optimism, on July 30. Altcoin referred to Coinbase founder Brian Armstrong. Armstrong’s ‘bald’ head was the source of this inspiration. Thus, it soon became a coordinating point for speculators in Blockchain.
The altcoin gained over $25 million in liquidity in two days. Thus, it reached a market capitalization of $100 million. However, the meteoric rise of the token turned out to be a classic case of market manipulation. Because BaldBaseBald, the distributor behind the token, pulled it with the carpet. Thus, it caused the altcoin price to drop by 85%.
Malicious market behavior behind BALD?
Market researcher Thiccy indexed all transactions from the Bald distributor. It also revealed a story of malicious market behavior. BaldBaseBald added 6,700 ETH (over $12.5 million) liquidity to the pool in the first 24 hours. This amount is a staggering amount of capital for a meme-coin on a new blockchain. The dealer’s actions have undoubtedly been bullish for speculators. Many thought that Brian Armstrong created this coin to create excitement. However, as soon as the distributor stopped adding liquidity to the pool, the price stagnated and fell.
Market behavior of BALD in 24 hours. Source: ThiccyAfter 24 hours, the distributor started bidding for BALD again. In the process, it caused the altcoin price to double. Subsequently, the distributor drew liquidity over 10,500 ETH (worth approximately $20 million). This led to an 85% drop in token value. Thiccy’s analysis showed that the distributor made a net profit of 2,789 ETH, or $5.2 million, after adding 6,870 ETH, purchasing 1,360 ETH at an average price of 0.0004, and withdrawing 10,704 ETH.
Ticcy: Be careful who you trust!
It was surprising how well-capitalized the actor was and how brave they were to carry out this blatant manipulative market behavior amid the public light on Coinbase’s compliance Blockchain. Thiccy concludes as a result of his analysis:
And so, BALD’s story ended. Play silly games, win silly prizes. I hope we can learn from this as an area where this market is full of market manipulation and unethical fraud. Be careful who you trust.
The latest example of rug-pull events: BALD
BALD’s price has increased by up to 4,000 times, bringing its market cap to over $100 million. Thus, the meme coin created a stir in the market. This was great news for early investors. Because some came out and profited as the wave rose. Some builders have taken advantage of this tide to create meme-coins to entice investors eager to join the BALD trend. Ultimately, it caused some meme-coin token holders to incur losses.
While BALD has already been scammed, Scope states that the address behind the 29 meme-coins also has a history of scams on other platforms, including BNB Blockchain and Arbitrum, a popular Ethereum layer-2 platform. On platforms where meme-coins are traded, community-provided liquidity is crucial due to the decentralized nature of trading. Rug-pull scammers typically provide liquidity to meme-coins. This attracts more users to buy the coin. Thus, it increases liquidity as prices rise. However, the creator then deliberately withdraws liquidity at this point. Hence, it converts meme-coins into a more liquid coin like Ethereum, causing token prices to drop to zero.
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