Are Base Blockchain Memecoins Actually Scams?
NAIROBI (Coinchapter.com) – The explosive growth of Base Blockchain memecoins has raised concerns about the prevalence of scams and vulnerabilities within this emerging ecosystem. As users flock to the platform in search of the next big cryptocurrency opportunity, a troubling trend has emerged. New data reveals that a significant number of these tokens pose serious risks to investors.
A recent analysis by Cointelegraph Magazine found that 90.8% of 1,000 new Base Blockchain memecoins failed to implement at least one of three critical security measures. These measures include locked liquidity, verified contracts, and the absence of honeypots. These vulnerabilities expose unsuspecting users to rug pulls, where developers can run off with funds, and honeypots prevent token owners from selling their holdings.
Security concerns loom large in the Base Blockchain ecosystem. The recent Dencun upgrade has been a game-changer for Ethereum’s layer two ecosystems, reducing transaction costs and making DeFi more accessible to users. This has led to a significant increase in the total value locked (TVL) on Base, surpassing $4 billion. Much of this activity can be attributed to the proliferation of memecoins as investors hope to strike it rich with a small initial investment.
The implications of these vulnerabilities are not just financial but also undermine the credibility of the Base blockchain ecosystem. According to David Schwed of Halborn, the proliferation of vulnerabilities often stems from creators’ ignorance or negligence, especially when tokens are created for amusement or to challenge the status quo.
The data suggests that 17% of tokens on Base are outright crypto scams, a concerning statistic that cannot be ignored. Additionally, 121 projects on Base have been identified as potential honeypots, and 48 impose excessive sales taxes of up to 100%. This puts investors at significant risk of falling victim to fraudulent schemes. It goes beyond technical shortcomings and represents a deliberate attempt to defraud investors.
The surge in Base Blockchain memecoin activity has not gone unnoticed, with the platform’s TVL and transaction volumes skyrocketing. In the week leading up to April 2, the number of new tokens launched on Base surged to 4,000, a significant increase from the 1,300 seen just a week earlier.
This memecoin frenzy has also had a noticeable impact on the broader decentralized finance (DeFi) landscape. While Solana, another fast and low-cost blockchain, has maintained a steady pace of 19,000 new projects per week, the trading volumes on its decentralized exchanges (DEXs) have dropped by as much as 59.5%. In contrast, four of the top five Base DEXs have experienced positive changes in trading volume, with Uniswap leading the way with a 147% increase to $405.09 million.
The leading Base Blockchain memecoins driving this surge include Brett (BRETT), Degen (Base) (DEGEN), and Toshi (TOSHI). These tokens have seen significant price movements in the past week, with BRETT gaining 14.1%, DEGEN losing 9.9%, and TOSHI surging 54.2%. However, as the overall analysis has shown, high trading volumes and market capitalizations do not necessarily indicate legitimacy or security.
Above all, the Base Blockchain memecoin phenomenon highlights the challenges faced by platforms aiming for mainstream adoption. While new users and capital are positive developments, scams and security risks continue to be prevalent. As the industry evolves, Base must find a balance between innovation and robust consumer protections. Only then can decentralized finance realize its full potential.
