Three wallets cashed in on “Base is for everyone” tokens before Base’s official X announcement.

Token launches continue to generate controversy, often due to poor execution that gives individuals with insider knowledge a chance to profit through front-running.

The latest case involves the “Base is for everyone” token, which was unveiled by Coinbase’s Ethereum Layer 2 solution, Base, on Wednesday. According to blockchain analysis firm Lookonchain, three crypto wallets bought large quantities of tokens before the official announcement on X, netting substantial profits in the process.

Around 19:30 UTC on Wednesday, Base revealed the launch of its token minted via Zora, a decentralized on-chain social platform that allows users to turn posted content into tradable coins. The token quickly surged, reaching a market capitalization of over $15 million, benefiting the wallets that had purchased tokens in advance.

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

One wallet, address 0x0992, spent 1.5 ether (ETH) to acquire 256.39 million units of the token at 12:30 PM UTC and sold the entire batch for 108 ETH after the official announcement, making a $168,000 profit in a little over an hour. Another address, 0x5D9D, invested 1 ETH ($1,580) and earned $266,000, while wallet 0xBD31 made $231,800.

The token’s market cap crashed to less than $2 million following Base’s launch of a new coin for its FarCon poster, draining liquidity from the “Base is for Everyone” token and leaving late investors in the red. However, the token rebounded, with the market cap rising to over $18 million by the time of this report, according to DEX Screener.

Jesse, the creator of Base, expressed the aim to “normalize putting all content on-chain” in a statement following the launch.

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

A disclaimer on Zora and an official statement on X further clarified Base’s stance: “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 are committed to bringing culture on-chain,” Base stated.

The volatile cycles seen in smaller tokens often create a negative wealth effect, where a few participants profit while the majority incur losses. This dynamic can drain liquidity from the broader digital asset ecosystem.

The more pronounced the boom-and-bust cycles tied to these tokens, the greater the negative wealth effect. A similar occurrence earlier this year with the launch of the LIBRA and TRUMP tokens resulted in the destruction of millions of dollars in investor wealth, marking a significant price peak for Bitcoin and the overall crypto market.