Is Base plagued with insider trading?🇺🇸

Base chain saw a surge in daily volume starting from March with a 515% volume increase month-on-month. New highs were hit again in April with a record-breaking $12.02b volume.

It’s safe to say that this attracted curious newcomers to the chain and insiders seeking profits.

A well-known and widely discussed, $BRETT, highlighted that regular investors faced a significant disadvantage compared to the insiders. Following a questionable "fair launch" where only whitelisted wallets could buy initially, the insiders and the team controlled the vast majority of the supply, approximately 81%.

After several days of influencers heavily promoting the token on Twitter, the insiders made one final push to encourage more purchases before going silent.

Needless to say, this isn't the first time Bubblemaps and the wider DeFi community have encountered corrupted projects on Base. On April 5th, we exposed a highly anticipated launch, Mooncats, where unfortunate traders have found themselves at a severe net loss, closer to -100x as opposed to the 100x they were originally led to believe.

The Perfect Trader 

Have you ever wondered if a trader with a staggering 100% win rate truly exists? Theoretically and statistically, such a trader, who nets only profitable trades should exist. We recently came across an individual that fits the criteria. But here’s the catch! In practice, such a trader should NOT exist, as sooner or later, every single person will have a negative net trade. Yet, someone has managed to consecutively trade profitably across a variety of memecoins that had launched on BASE-chain. BUT HOW?

The story begins with a very particular wallet - 0x1219. This is the wallet at the center of various freshly launched memecoins such as BasedShibaInu, Blerf, Basechainbook and Bengonbase. Namely, a wallet snipes a large amount of supply and disperses it into several different wallets. In all likelihood, this strategy is merely used as a method to not raise suspicion surrounding wallet distribution on the holders list.

Specifically, if we look into the tokens above, we can notice a pattern emerging. In the case of BLERF, wallet 0x5193 sniped 17% of the supply for 0.6 ETH. Subsequently, the sniped supply was dispersed among several wallets. Most of these wallets then sent the tokens to wallet 0x6ffa, which appears to be a bot designed to simulate legitimate trading and generate significant volume spikes (fake volume) to be featured at the forefront of numerous volume tracking sites, i.e. Dexscreener.

Basescan screenshot: https://basescan.org/tx/0xd17bf8cb95963e92e1f496e2728ce2fa1e73137c5e8f58be1f3a50b9632bfb16

A similar process was used on $BSHIB as well. The insider sniped the initial supply via multiple wallets (e.g. 0x15e8, 0x1219, etc.) and dispersed it to another batch of wallets, out of which 0x9db3 was used to create fake volume.

This person netted a whopping profit of over $1 million with their “PERFECT” trading patterns. Concretely, they profited $500k on $BLERF, $500k on $BSHIB and 400k on $BENG. What information does he have that is not available to the public?

In conclusion, achieving a net profit 100% of the time is not realistically possible. This case study demonstrates that something else is always going on behind the scenes if someone appears to fit the criteria of the perfect trader. Usually, it boils down to having inside information, which seems like the case with our examples.