Coinbase Accused of Frontrunning in Connection With the ‘Base Is for Everyone’ Token

Three crypto wallets took advantage of the “Base is for everyone” token before Base’s official launch on X.

Token debuts have frequently sparked controversy due to poor execution that allows individuals with inside information to profit through front-running tactics.

The latest example involves the “Base is for everyone” token, which was unveiled by Coinbase’s Ethereum Layer 2 solution, Base, on Wednesday. According to blockchain analysis from Lookonchain, three crypto wallets purchased large quantities of the token before the official announcement, making significant profits as a result.

At around 19:30 UTC on Wednesday, Base introduced the token minted via Zora, an on-chain platform that enables content creators to turn posts into tradable coins. The token saw an immediate surge, reaching a market cap of over $15 million, significantly benefiting those who bought the tokens in advance.

“Three wallets bought large amounts of ‘Base is for everyone’ before @base posted and sold them, making a profit of approximately $666K,” Lookonchain shared on X.

One wallet, address 0x0992, used 1.5 ether (ETH) to purchase 256.39 million units of the token at 12:30 PM UTC. The wallet then sold the entire amount for 108 ETH after the official launch, netting a profit of $168,000 in just over an hour. Another wallet, 0x5D9D, invested 1 ETH ($1,580) and earned $266,000, while a third wallet, 0xBD31, made a profit of $231,800.

The token’s market cap plummeted to under $2 million after Base introduced another coin related to its FarCon poster, which drained liquidity from the “Base is for Everyone” token and left late buyers facing losses. However, the token has since rebounded, with the market capitalization reaching over $18 million, according to DEX Screener.

Jesse, the creator of Base, affirmed the goal of the project: “The objective is to normalize putting all content on-chain,” he stated.

Coinbase clarified that the “Base is for Everyone” token is not the official cryptocurrency of Base and emphasized that the Layer 2 solution did not directly sell the tokens. A Coinbase spokesperson told CoinDesk, “Base posted on Zora, which automatically tokenizes content.”

Further clarification came from Base itself, which shared on X, “To be clear, Base will never sell these tokens, and these are not official network tokens for Base, Coinbase, or any other related product. The content we share is creative, and we’ll continue to bring culture on-chain.”

The boom-and-bust nature of such smaller tokens often leads to a negative wealth effect, where a select few profit while the majority suffer losses, draining liquidity from the broader market.

As demonstrated earlier this year with the debut of LIBRA and TRUMP tokens, such volatile token cycles can result in significant losses, marking price peaks for Bitcoin and the broader crypto market in the process.