LeetSwap, the leading decentralized exchange by trading volume and liquidity on Base, Coinbase’s Ethereum Layer 2 solution, has halted trading on its platform due to possible depletion of the platform’s liquidity pools.
The decentralized exchange team said in a tweet this morning that some liquidity pools on DEX have been “potentially compromised” and trading continues to be halted while the issue is “investigated”.
The team said in a follow-up tweet that they were “trying to find a way to recover the locked-up liquidity.”
The platform allows users to lock their liquidity provider tokens, essentially receiving tokens for providing liquidity to a DEX, in exchange for LEET token rewards.
A LeetSwap user wrote on his Discord that his locked liquidity in the Axelar Wrapped USDC (axlUSDC) and Ethereum (ETH) pool “disappeared” overnight.
The team added that withdrawals of assets not locked in the pools are open while trading remains suspended.
According to DeFiLlama data, LeetSwap had $41.2 million in deposits as of Monday when the meme coin hype started on Base.
A meme coin is a category of cryptocurrency token that has no particular utility but gains popularity and value primarily due to its association with an internet meme, joke, or viral content.
Its liquidity has since fallen sharply following a massive rug-pull scam with BALD tokens and this morning’s trading pause. Currently, the DEX holds $7.17 million worth of deposits.
A rug pull is a developer scam in which a company that created a decentralized application or token suddenly shuts down or disappears, taking investor assets with them.
Meme coin rush on base
Coinbase’s Layer 2 platform opened up the network to developers on July 13 following the launch of numerous meme coins.
According to DEX Screener data, there are currently 100 meme coins listed on LeetSwap.
On Sunday, LeetSwap saw $200 million in trading volume for meme coins, with the BALD token accounting for more than half of the trading interest.
The meme token may refer to Coinbase CEO Brian Armstrong’s shaved head. BALD’s price surged more than 3000% within a day of its launch on July 30th.
However, at its highest market cap of around $28.1 million, the token’s developer on LeetSwap withdrew $25.6 million worth of liquidity, causing the token to plummet more than 92% in minutes.
Blockchain experts suspect that the notorious founder of FTX, Sam Bankam-Fried, was involved in the SOON action.
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