The latest super-popular project to show up on Dextools, $BASE, is a token that rebases to one-trillionth of the total crypto market cap. For instance, the current cap is around $580 billion, so the price of the token should be $0.58. Genius idea, as it allows folks the ability to invest in a crypto index fund of sorts.
It got a score of 99 on Dextools, and although the site looks janky as fuck, I don't think it's a rugpull.
So since it's not a scam, we can take a good look at the $BASE charts to see how to navigate a token like this. Should you only buy when the token is under the rebase value? Why does a token like this pump to a level where it receives a 300% rebase (like it did a few hours ago)? Let's see.
Your Move
Regardless of the tokenomics of a coin, I come at every project with the same assumption. Unless there is something unique about the token or the community, the token will pump, dump and slide. Anything other than that has some sort of sustainability, and you need to find out the source of that sustainability to crack the patterns the coin will take in the future.
$BASE was pretty easy. It started at around $0.40 and pumped right before each rebase to a multiple of the base value ($0.58). After the rebase, it took a dump of around 80% back down to the $0.50 range.
This is exactly what I expected from a rebase token, although I had no idea why it would pump so much before rebase. The second wave saw the token price surpass $2.50. Some people in on that run got a quick 4X in less than 2 days.
So I got in at $0.82. Too quick of a trigger finger, because it touched $0.43 before moving back up to $0.82, where it stands as I write this. There's resistance at that level although the chart looks bullish, so I'm staying in the ballgame.
The Patterns
I believe the reason that the token stalled out at $0.82 is because the initial push is gone. This token relies on growth to push it past its base value, and the first two cycles seemed to have exhausted the first wave of investors. The coin got to a market cap of just under $60 million, which is impressive for a 5 day coin. Rank #159 on Coingecko right now.
The big pump, however, brings to mind a previous rebase project I was in called Xplosive Ethereum. After it got its big pumps, which were like 23% daily rebases two days in a row, it was never the same. Right now the project, which has a legit team and a non-degen community, is completely rekt.
(According to the tokenomics, the price of xETH should be 1/10th of Ethereum, or around $6.00.)
Big lesson I learned: When a coin dumps, it dumps. There's nothing even the best tokenonomics can do about it, and every project relies on growth. These are all ponzis. xETH dumped because people got used to 20% and 10% daily rebases. Anything less than that was not worth the whales' time, so they moved on. After that, it didn't matter how the team tried to keep everyone else on board. They tried taxing sales 7%. Then they tried taxing sales 20%. Then they tried changing the rebase time. They tried everything.
This whole game is about adoption and that's it.
So will users continue to adopt $BASE after a 300% rebase? I'm betting on it. A couple of reasons I don't think this coin will dump:
The value proposition is marketed well — The team and their shit website have a great proposal, which is allowing a convenient investment into the crypto space. I believe this is good enough of a proposal to keep a couple more rounds of people coming in.
The community is still energized — The Telegram community is growing, and more importantly, people outside of the group are talking about $BASE on Telegram. Don't trust the lambo crowd just because they are saying "buy buy buy" and posting the Jim Cramer meme. They'll dump on you in a second. I look only at the number of people in the group and if it's going up.
The price is above the rebase value — Even if we stay here, I still get a rebase. It looks like the holding price now is around $0.80, which means people are getting in just on the idea of getting the rebase. I don't think most people even know what that is other than "number go up." That's fine. Plenty of people make plenty of money off of that.
The pattern looks the same as the previous two — It's tough to wait out a pattern, but I'm going to force myself to do it. The previous two cycles went through an accumulation period where the price stuck around $0.80 for hours. The price then pumps before the rebase. The beginnings of this pattern look the same, so I'm going to wait for it to play out again.
Stay in or Get Out?
When I get my pump, the next question is whether to stay in for another cycle with more tokens or get out. With xETH, I played it in the middle. I took out my initial capital and let the rest ride. But the project proved itself sustainable for a few more days. So I bought back in and rode a few more days until it was apparent that the ride was over.
Staying in on rebase tokens gives you a bit of legroom. With huge rebases, even if the price drops a lot, you have more tokens. So you can still sell back in profit if you can make it past two cycles or so. The problem is waiting that out. You have to keep your eye on Telegram group numbers and other sentiment factors. You also can't be afraid of big dumps with rebase tokens. As long as they happen on schedule, after the rebase, there's nothing afoul and you can justify holding.
I think one cycle on $BASE should be a relatively simple thing. If I get a 3X, I'm going to pull out my capital and let the rest ride. The trick is to not get greedy and pay attention to those degens who run around bragging about their 20X gain. If I can stay away from trying to get 20X, then I think I'll do well.