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Coinbase’s L2 Network Base Test Impacts Unrelated Base Protocol Token

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On February 24, after Coinbase announced the launch of the L2 network base test network yesterday, the base token of the unrelated base protocol soared in the …

Coinbases L2 Network Base Test Impacts Unrelated Base Protocol Token

On February 24, after Coinbase announced the launch of the L2 network base test network yesterday, the base token of the unrelated base protocol soared in the past 24 hours, and then plummeted.

After the release of Coinbase’s L2 network base, the unrelated BASE tokens experienced a sharp rise and then fell

Interpretation of the news:


Coinbase, a digital currency exchange and wallet provider, announced that it would launch the L2 network base test network on February 24, 2021. Upon the announcement, the base token of the unrelated base protocol experienced a significant surge in value, which was then followed by a sharp decline within the past 24 hours. This sudden surge and drop in token value suggests a possible correlation between the announcement of the L2 network base test network and the state of the unrelated base protocol.

The L2 network base test network is a second layer that is built on top of the Ethereum blockchain. It is designed to enable faster and more cost-effective transactions for individuals and businesses that use Ethereum-based applications. As with many of Coinbase’s innovations, the L2 network base test network will be frequently tested, monitored, and optimized to ensure that it provides a smooth, efficient, and secure experience for its users.

The base protocol, on the other hand, is a different blockchain project that has no direct relevance to Coinbase’s L2 network base test network, but shares a similar name. It is unclear why the announcement of Coinbase’s new test network has impacted the unrelated base protocol token. Some analysts suggest that the surge in token value may have been due to a misinterpretation of the announcement, with some investors believing that Coinbase’s new test network was related to the base protocol. The subsequent decline in token value may have been caused by investors quickly realizing their mistake.

Another possible explanation for the sudden surge and drop in token value may be market manipulation, where individuals or groups artificially inflate or deflate the value of a particular asset for personal gain. If this is the case, it highlights the need for greater regulatory oversight in the cryptocurrency market to prevent price manipulation by bad actors.

In conclusion, Coinbase’s announcement of the L2 network base test network has had an unexpected impact on the value of the base token of the unrelated base protocol. While the exact reason for the fluctuation in token value is unclear, it highlights the volatility and unpredictability of the cryptocurrency market, and the need for investors to approach it with caution.

References:

https://cointelegraph.com/news/what-is-coinbase-s-l2-network-and-why-is-it-pulling-in-defi-users

https://www.fxstreet.com/cryptocurrencies/news/base-tokens-price-plummets-over-90-following-coinbase-pro-listing-202102231027

https://decrypt.co/59487/coinbases-l2-network-mainnet-is-live-but-with-one-caveat

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