Coinbase’s own blockchain launch followed by copycat tokens
Coinbase launched its own Layer-2 blockchain yesterday, built in partnership with Optimism in its OP stack.
The new Layer-2 blockchain, called Base, will host many of Coinbase’s on-chain products and offer low-cost EVMs to developers.
Piggybacking on breaking news
Unfortunately, opportunistic bad actors are once again trying to cash in on the success of other firms. Not even a day after Base was launched, Solidus Labs announced via their Token Sniffer website that at least four new tokens had been identified, all with names that played on Coinbase’s new product, such as the Base Token and even the very generically named ” Coin Chain.”
These tokens try to give off a sense of legitimacy, hoping to lure gullible users into buying their tokens before they realize they have nothing to do with Coinbase. Unfortunately, there’s an even bigger problem at play: according to Token Sniffer, 3 of the 4 symbols in question appear to be honeypots.
In the crypto world, a honeypot is a smart contract that doesn’t allow anyone but the contract creator to withdraw money once it’s deposited into the wallet, meaning that even if a user realized they were being scammed, there wasn’t much they could do about it.
One of those tokens, BASE, surged 250%, according to Coinmarketcap, reaching a price of $7.05 — bringing the coin’s market cap to roughly $1 million — before crashing back to around $2 at the time of writing.
In addition, Coinbase has stated that they have no intention of issuing any tokens associated with this new blockchain – so any further tokens of this type can be dismissed as a scam out of hand.
Market immaturity
Unfortunately, new tokens that attempt to cash in on market hype have been created repeatedly, revealing a certain market immaturity in the cryptosphere, according to Bloomberg.
According to Darius Tabatabai, the founder of Vertex Protocol DEX, users who buy these tokens are either misled by the name or simply fall for scams.
“Coins minted on the basis that they sound like a significant project but only benefit from a news cycle are a sign of continued immaturity in digital assets. Anyone buying these is either making a mistake with a protocol that does something completely different or simply falls for deliberate fraud.”
Scams like the infamous Squid Game Token are the most brazen, but the more recent examples of AI-centric tokens attempting to capitalize on the recent surge in interest in AI are also emerging. These problems are further exacerbated by bots buying up new tokens on the spot, as notorious prankster Avraham Eisenberg demonstrated.
