Otherside Sales Causing Disrupt Ethereum Blockchain
Creator of the famous Bored Apes Yacht Club collection of NFTs Yuga Labs, Launched a sale on Saturday. The Sale was of the virtual land connected with its highly-anticipated metaverse project. The Project “Otherside” raised about $320 million worth of cryptocurrency in the largest offering of its kind. Demand was so powerful that activities related to the event caused ripple effects across the entire Ethereum blockchain. This disrupting activity sent transaction fees skyrocketing.
Holders of the ApeCoin token who secured their identities purchased Otherdeeds for 55,000 parcels of virtual land in Otherside. Otherside Project is a planned metaverse game and the latest extension of the Bored Ape franchise.
Anticipation that appeal would be strong for the plots Ethereum-based NFTs called Otherdeeds had pushed up the price of ApeCoin last week ahead of the Othersides’ sale itself.
Based on ApeCoin’s price of $19 as of Saturday, each plot cost a consumer around $5,800 also the transaction costs, or gas fees, in Ether, which zoomed after the sale went live at 9 p.m.
As the land grab drew heavy requests. Transaction costs just to mint Otherdeed NFTs after the launch reached around $123 million. The data from Etherscan suggests that each Otherdeed required about $6,000, or 2 Ether, in transaction fees to mint. This was more than the price of the deed itself.
Jason Wu, founder of decentralized lending protocol DeFiner says that “Yuga Labs’ virtual land Otherside sale has started one of the highest spikes in transaction fees on Ethereum,” he also added that he has never seen other NFT launches causing such high gas fees, but this is definitely one of the highest.
Minting a token or completing a transaction on Ethereum demands token creators or traders to pay a fee to those that order transactions on the network. Transaction fees go higher when the network becomes crowded given more fees are needed to prioritize a transaction. This can impact the Ethereum-based business of apps like Uniswap. Hence, effectively slowing the transactions on these other platforms.
Originally Yuga Labs planned for the sale to be held in a Dutch Auction format. In that Auction, the price of the Otherdeed NFT would go down over time to prevent Ethereum from being jammed with high transaction fees.
However, it later crossed the format and went with another plan to cap the number of Otherdeeds that could be purchased per wallet in each wave of the sale. The new plan failed to reduce the anticipated congestion. Yesterday Yuga Labs apologized to people on Twitter for turning off the light on Ethereum. They also suggested the possibility of establishing an ApeCoin blockchain.
The latest Follow up tweet on Otherside Project from yuga lab,
The ApeCoins raised in the sale will be stuffed. This means that they can’t be sold. Thus reducing the number of coins in circulation for one year.
A Yuga Labs spokesperson refused on Friday to reveal the details of whom the raised money would go to, or if large holders of ApeCoin, including Andreessen Horowitz, Animoca Brands, and others planned to participate in the land sale.
In an email ahead of the sale Animoca’s Yat Siu mentioned that they will be purchasing as well, further adding that there were restrictions on how many NFTs a single digital wallet can buy in different phases of the land deed sale.
Except for the 55,000 Otherdeeds sold Saturday, another 45,000 were allocated to holders of Bored Ape Yacht Club and Mutant Ape NFTs.Also, another 100,000 of the tokens are expected to be awarded later to certain Otherdeed holders, according to the Otherside website.
While the 55,000 Otherdeed NFTs were sold out at midnight New York Time, the process for BAYC and MAYC holders to claim their free Otherdeeds was initially postponed to avoid sending gas fees even more. That one-time claim finally reopened for those NFT holders as gas fees settled.
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