Join ACCESS EU, the first-of-its-kind digital assets security and DLT summit
JUNE 7TH, 2024 @ EURONEXT AMSTERDAM ⟶
Halborn Logo

// Blog

Explained: Hacks

Explained: The BALD Token Rug Pull (July 2023)


profile

Rob Behnke

August 3rd, 2023


BALD was a token launched on Base, Coinbase’s Layer 2 testnet. In July 2023, the creator behind BALD performed a rug pull that netted them $5.9 million and cost investors $23 million.

Inside the Rug Pull

BALD was a memecoin launched on Coinbase’s Layer 2 testnet, Base. The project experienced a massive rise in value shooting up 4,000,000% in 24 hours and reaching an estimated $68 million. Much of this growth was attributed to active investments by the deployer, who put in $12 million within the first day and their decision to buy BASE, which helped to further raise the price after it stagnated.

At the time, BALD had no UI built, making it impossible to bridge to the contract. The only available bridge was unidirectional, bridging back to the Ethereum blockchain. Despite this, the coin attracted massive investment.

When the rug pull came, the deployer was able to drain an estimated $23 million from the project. They had made large investments in the token, but they still made a profit of about $5.9 million from the attack.

Investigation of the rug after the fact revealed potential links to Alameda Research, a sister company to the FTX cryptocurrency exchange that went down in flames the previous year, as well as other major DeFi projects such as Sushi and dydx governance. 

This resulted in speculation that Sam Bankman-Fried may have been behind the rug pull. However, SBF’s currently limited access to technology and other factors indicate that another Alameda Research employee might have been the culprit.

Lessons Learned from the Attack

Rug pulls have become common, but some are more blatant than most. In this case, about $68 million in investment was poured into a project lacking the basic infrastructure needed to achieve its goals. In the aftermath, even the deployer that performed the rug pull said it was a memecoin with no intrinsic value.

Before investing in any DeFi or crypto project, do your own research and learn the warning signs of a crypto exit scam.