In April 2025, Coinbase’s Layer-2 network, Base, found itself at the center of a crypto storm with the launch of the “Base ID for Everyone” token. What began as an experimental foray into content tokenization spiraled into a rollercoaster of hype, volatility, and accusations of market manipulation. The token, minted on the Zora platform, skyrocketed to a $17 million market cap within hours, only to crash by over 95% in a single candle, leaving thousands of investors reeling. This article dives deep into the events, the controversy, and the broader implications for Coinbase and the crypto industry.
On April 16, 2025, the official Base X account posted a seemingly innocuous message: “Base is for everyone,” followed by a second post stating “coined it” with a link to Zora, a platform for minting digital content as ERC-20 tokens. Unbeknownst to many, this tweet was auto-minted into a tradable token on Zora, dubbed “Base ID for Everyone.” The token was launched on Uniswap, a decentralized exchange, and quickly gained traction due to Base’s association with Coinbase, one of the world’s largest crypto exchanges.The move was framed by Base as a “content creation experiment,” testing the boundaries of tokenizing social media posts. However, the lack of clear communication about the token’s purpose and distribution sparked confusion. Within an hour, the token’s market cap surged to over $17 million, driven by speculative frenzy and the perception of Coinbase’s endorsement.
The rapid ascent of Base ID for Everyone was fueled by hype on X and other platforms, with traders rushing to buy into what appeared to be a Coinbase-backed meme coin. However, on-chain analysis revealed troubling signs. Analyst Hantao Yuan reported that the top three wallets held nearly 47% of the token’s supply, with one wallet controlling 25.6%. These wallets, suspected to be insiders or bots, began dumping their holdings shortly after the peak, triggering a 95% price crash in a single candlestick. Over 2,500 wallets were affected, with many users claiming they were misled by the token’s association with Coinbase.Posts on X captured the community’s outrage, with users like @IcedKnife calling it a “rug pull” and accusing Coinbase of deploying a wallet to manipulate the token’s launch. Dex Screener data confirmed the token tanked 81% in minutes, erasing millions in value. The volatility was exacerbated by volume bots, which artificially inflated trading activity, luring unsuspecting retail investors into the trap.
In the aftermath, Base issued a statement defending the token as part of an experimental effort to tokenize content and explore new use cases for blockchain. Jesse Pollak, creator of Base, framed the incident as a cultural experiment, stating, “This is culture.” However, this explanation did little to quell the backlash, as users pointed to the concentrated token supply and rapid dumps as evidence of foul play. Coinbase’s official X account doubled down, posting two additional tokenized messages, further fueling accusations of recklessness.[](https://cryptobriefing.com/coinbase-base-backlash/)The timing of the incident raised eyebrows, coming just weeks after the U.S. Securities and Exchange Commission (SEC) dismissed a lawsuit against Coinbase on February 27, 2025. The dismissal, announced as part of the SEC’s shift toward a new Crypto Task Force, had bolstered Coinbase’s reputation. However, the Base ID for Everyone fiasco threatened to undermine this goodwill, with critics like @shanaka86 questioning whether Coinbase was “just another crypto grifter.”
Zora, the platform used to mint Base ID for Everyone, is designed to allow creators to tokenize digital content, such as art, music, or social media posts. The Base team leveraged Zora’s infrastructure to turn their tweet into an ERC-20 token, a process that requires minimal technical effort but carries significant market implications. While Zora’s role was purely technical, the incident highlighted the risks of tokenizing content without clear governance or distribution mechanisms.The experiment also tied into Coinbase’s broader push for tokenization. In March 2025, Coinbase announced plans to tokenize its $COIN stock, aiming to integrate blockchain-based securities into the U.S. financial system. The Base ID for Everyone token was seen by some as a test case for this vision, but its failure exposed the challenges of managing speculative fervor in decentralized markets.
The concentrated token supply and rapid price swings raised red flags about market manipulation. The involvement of volume bots, as noted by Hantao Yuan, suggested artificial inflation of trading activity, a tactic often used to attract retail investors before a dump. The top three wallets’ dominance—holding nearly half the supply—further fueled suspicions of insider trading or coordinated selling.[](https://cryptobriefing.com/coinbase-base-backlash/)This incident echoed broader concerns about unvetted tokens on decentralized exchanges (DEXs). A Coinbase Institutional report from October 2024 warned that trading volumes for such tokens are a key metric to watch, especially amid U.S. enforcement actions against market manipulation. The SEC’s recent fraud charges against three crypto market makers for creating “false appearances of active trading” underscored the regulatory scrutiny facing such practices.[](https://www.coinbase.com/institutional/research-insights/research/weekly-market-commentary/weekly-2024-10-11)
The fallout from Base ID for Everyone reverberated across the crypto community. Retail investors, many of whom were new to Base or Coinbase, felt betrayed by the perceived endorsement of a token that collapsed so spectacularly. Social media platforms like X became battlegrounds for debates about Coinbase’s responsibility, with some users calling for greater transparency in token launches.For Coinbase, the incident posed a reputational risk at a time when it was expanding its influence. With over 108 million customers and $404 billion in managed digital assets as of 2024, Coinbase is a titan in the crypto space. However, past incidents, such as a 2021 hack affecting 6,000 users and a 2024 third-party data breach, have highlighted vulnerabilities. The Base ID for Everyone fiasco added fuel to criticisms of Coinbase’s operational rigor, despite its recent legal victory over the SEC.
The Base ID for Everyone saga offers several lessons for the crypto industry:
Moving forward, Coinbase and Base must address these concerns to restore trust. Enhanced vetting processes, clearer disclaimers, and decentralized governance models could mitigate similar risks. The industry as a whole must grapple with balancing innovation—such as content tokenization—with the need to protect retail investors from speculative traps.
The Base ID for Everyone token was a bold but flawed experiment that exposed the perils of unchecked speculation in crypto. While Coinbase aimed to push the boundaries of blockchain innovation, the lack of transparency and concentrated token supply turned a creative idea into a cautionary tale. As the crypto community reflects on this incident, the focus must shift toward building trust, ensuring fair markets, and harnessing tokenization’s potential responsibly. For now, the Base ID for Everyone fiasco serves as a stark reminder: in the wild west of DeFi, even giants like Coinbase can stumble.
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