Thursday, May 19, 2022
HomeCrypto NewsBored Ape Yacht club creator's metaverse mine rocks the Ethereum blockchain

Bored Ape Yacht club creator’s metaverse mine rocks the Ethereum blockchain

Yuga Labs, the web3 firm behind the Bored Ape Yacht Club disrupted Ethereum blockchain. A flood of users tried to buy NFTs representing virtual land plots in Otherside’s upcoming metaverse project, Otherside, at a flat price of 000 ApeCoin. A total of 55,000 Otherdeeds sold at a flat price of 305 ApeCoin, or around $5,800 at the time of purchase (via CoinTelegraph), raising about $320 million in what was considered the “largest NFT mint in history.”

Otherdeeds can be minted using BAYC’s native ApeCoin but still need Ethereum to pay gas fees. The cost of a transaction on Ethereum’s blockchain is called a gas fee. As the network becomes more busy, fees tend to increase because it takes more time to process transactions.

Gas fees rose due to the high volume of transactions at the Otherdeed Mint. As noted by CoinTelegraph, Reddit user u/johnfintech pointed out that some buyers shelled out anywhere from 2.6 ETH ($6,500) to 5 ETH ($14,000) in gas fees alone — more than the cost of an Otherdeed NFT (and in some cases, more than twice the cost). The total cost of executing transactions on the Ethereum blockchain by the time virtual land deeds were sold was approximately $123million (via Bloomberg).

Soon after the mint closed, Yuga Labs posted an apology to Twitter. Yuga Labs stated that they were sorry to have turned off the lights on Ethereum temporarily. ApeCoin will have to migrate to its own blockchain in order to scale properly. “It seems obvious. We encourage the DAO to think in this direction. The ApeCoin DCO, which is responsible for making decisions within the ApeCoin Community, exists separate from Yuga Labs. The Ape Foundation’s Board is responsible for making the DAO’s decisions. It includes Alexis Ohanian (reddit cofounder), Yat Siu (animoca cofounder) and other members.

We are sorry to have turned off the lights for Ethereum for a bit. ApeCoin will have to migrate to its own blockchain in order to scale properly. It is obvious. We encourage the DAO in this direction.

— Yuga Labs (@yugalabs) May 1, 2022

Transactions on Ethereum-linked services like Uniswap were slowed down by the disruption, which also caused Etherscan to crash. Many users reported that they lost thousands of dollars due to failed transactions. Yuga Labs promised that they would reimburse customers for gas fees incurred in failed transactions. However, it is not clear what the refund process will look. The Verge reached Yuga Labs for comment, but did not receive a response immediately.

Yuga Lab was originally trying to avoid an “apocalyptic gas war” or sudden rise in gas fees because of high demand. It stated that it would abandon the Dutch auction method of minting. This involves a NFT being sold at a fixed price, and then gradually lowered over time. Instead, it used an alternative method of selling NFTs at a flat rate and allowing more mints to take place over time.

Instead of resorting to a fake Dutch Auction, Otherdeed will use the following mechanism: The sale price will stay flat for the duration of the sale and there will be a low limit per-wallet on the number NFTs that can be minted. (note that this does not mean “minted at once”, but “minted in whole”). After the first wave of low-gas transactions has been submitted and the network calms down, the wallet-level limit for minting will be raised to allow for a second wave. Those who are satisfied will not mint, but those with more ApeCoin will.

Some users suggested ways to improve the process, despite the mess that was the mint. Will Papper, co-founder and CEO of Syndicate DAO (a platform that allows users to create web3 investment groups), suggested that Yuga Labs optimize their contracts to lower gas costs and adjust the mint mechanism.

Gas optimizations are just one aspect of the equation.

A better mint mechanism design is needed (allowlist, Dutch auction) + gas optimizations.

Gas money is money that can go to builders. This is done via both the mint design and smart contract.

— Will Papper (@WillPapper), May 1, 2022

Yuga Labs received $450 millions in funding in March to help build the Otherside. This is a decentralized metaverse that includes elements of gamification. It’s expected to include Yuga Labs NFT brands such as CryptoPunks or Meebits. However, the company plans to expand support for NFTs from other entities. Although much is still unknown about the potential Otherside, it has not stopped its passionate community from investing in it.

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Henry Hicks
Henry Hickshttps://nonfungibletalk.com
NFT and Crypto Enthusiast. Loves Travelling and Exploring the Metaverse!
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