This Sunday, an unknown man created a buzz on Twitter after turning $1,000 into $1.5 million in less than 24 hours thanks to a shitcoin launched on Base, Coinbase’s blockchain. Behind this “stroke of genius”, we discovered a case that strongly resembles insider trading. We decipher it for you.
3 million % rise in 24 hours
Although the cryptocurrency ecosystem is capable of offering us exceptional investment opportunities, performances like this one don’t come along every day: +3 million% in less than 24 hours. Dubbed the BALD, this token was created on Saturday July 29 and listed on Base, Coinbase’s blockchain.
In a nutshell, Base is a layer 2 blockchain launched by Coinbase in February 2023. It is based on Ethereum (ETH) and leverages the technical infrastructure offered by Optimism (OP), an Optimistic Rollup blockchain. Since its launch, Base had struggled to attract new users, until this weekend.
An Internet user by the name of “cheatcoiner.eth” quickly created a buzz on Twitter. He announced the purchase of $1,000 worth of BALD, just a few minutes after its launch and when no one was yet aware of its existence. The next morning, just 24 hours later, he turned his initial investment into $1.5 million
In the space of a few hours, a wave of new tokens appears on the Base blockchain. Presumably, they’re all shitcoins, i.e. cryptocurrencies with no basis and destined to disappear quickly. Their names are BRIAN (in reference to Coinbase CEO Brian Armstrong), PEPE and MOON.
At the same time, the number of users on Base is exploding, each chasing the next nugget that will enable them to become millionaires. But what’s really going on? We investigated, and the story doesn’t sound as much like a stroke of genius as it might lead you to believe.
A stroke of genius, or insider trading?
First of all, let’s take a look at this famous “cheatcoiner.eth”. Despite an almost blank Twitter account prior to the announcement of his BALD purchase, this Internet user now has over 25,000 followers.
He is taking advantage of this new community to promote the Base blockchain and the new shitcoins that are continually appearing: “The Base blockchain will give birth to several millionaires in the next few days”, he tweeted last night.
Furthermore, he explains that he is extremely “bullish” on the future of these shitcoins and intends not to sell a single cent of BALD until the asset reaches $100 million in capitalization. However, an account specializing in on-chain analysis was quick to spot this individual’s addresses, revealing that he did indeed sell in profit:
These 4 addresses spent 0.534 $ETH($1K) to buy 50M $BALD (50% of the total supply) within 4 mins of $BALD starting trading.
Then sold 37M $BALD for 554 $ETH($1.04M).
Earned $1M with $1K in 1 day! pic.twitter.com/gXIDRjbhic
– Lookonchain (@lookonchain) July 30, 2023
Next, by analyzing the BALD smart contract, we can easily get our hands on the address of the individual who created the token and contributed the majority of the liquidity: 0xccfa0530b9d52f970d1a2daea670ce58e4176389. A little research reveals that this is a well-known whale.
Indeed, in a publication dated April 3, 2023, we learn that this address holds 19.6 k cbETH, or around 40 million dollars. This represents 49% of the total quantity of cbETH in circulation. As a reminder, cbETH is a token representing Ether (ETH) stored on Coinbase.
What can we conclude from all this? Although this is all supposition, it’s highly likely that “cheatcoiner.eth” has received exclusive information from the founder of the BALD token, or even that it’s the same person. Moreover, it would appear that this person is closely linked to Coinbase, since he holds 50% of all cbETH.
Why would Coinbase (or the Base team) do this? Presumably to promote their blockchain and attract a wave of new users. If so, it’s an unconventional marketing strategy, but one that has proved extremely effective. Or maybe it’s all just coincidence…
