Yuga Labs, the startup behind the Bored Ape Yacht Club (BAYC) that's valued at $4 billion, had its highly anticipated Otherside metaverse mint on Saturday night, clogging the Ethereum mainnet and sending gas prices to shocking heights.
In less than 24 hours, Yuga Labs has generated more than $561 million from just the Otherside’s “Otherdeed” NFT sales.
NFTs are unique blockchain tokens that signify ownership of a digital or physical asset. In the case of Otherdeeds, each is meant to be “the key to claiming land in Otherside,” Yuga Labs’ upcoming metaverse game.
Some 55,000 NFTs were minted at 305 APE each, which means each Otherdeed cost about $5,800 given Apecoin’s price (approximately $19) at time of mint. Yuga Labs raked in over $318.7 million from this mint alone.
According to data from CryptoSlam, Otherdeed already has seen over $242 million in total secondary volume traded. Of that figure, over $190 million was on OpenSea.
Due to the high number of NFTs and higher demand, the Otherdeed mint, which began at 9 pm EST Saturday night, immediately caused an Ethereum gas war. Traffic on block explorer Etherscan also led to reports that the site wasn’t working for many users.
Gas wars can occur on proof-of-work chains like Ethereum when a sudden increase in demand for fast transactions clogs a network, sending fees soaring as users try to cut to the front of the line.
Ethereum gas fees can see extreme spikes during such gas wars, and last night was no different, as fees suddenly spiked to thousands of dollars per transaction.
While some were able to get their transactions processed within a few hours for a couple hundred dollars in gas fees, others reported paying upwards of $4,000 for a single transaction. (The average gwei, or price of Ethereum gas, over the course of the night was over 6,000, roughly 100 to 200 times normal.)
Otherside-related transactions have consumed over 64,000 ETH in gas fees at the time of this writing, which is almost $180 million. Some have pointed out that fees didn’t have to be that bad had Yuga Labs implemented a few backend optimizations.
Will Papper, co-founder of SyndicateDAO, wrote last night that the Otherdeed smart contract has “nearly zero gas optimizations.” He argued that just “modifying a few words would have saved $80M+” in gas fees.
But Ethereum co-founder Vitalik Buterin has a different view.
“Don’t think optimizing the contract would help,” he said of the Otherside mint. “Regardless of contract details, tx fee goes up until list price + tx fee = market price. If gas usage per purchase decreased 2x, the equilibrium gas price would have just been >12000 gwei instead of 6000.”
Yuga Labs has since promised it would be refunding those with failed transactions.
Regardless, those with BAYC or Mutant Ape Yacht Club NFTs will be able to claim Otherdeed NFTs over a three-week period, allowing holders to avoid high gas fees.
Some have criticized the Otherdeed NFTs, noting that they are the first Yuga Labs assets that don’t grant holders full commercial rights.
BAYC holders had conflicting opinions about the chaotic mint. Some blamed the high fees and slow transactions on the Ethereum blockchain, while others blamed Yuga Labs’ Otherdeed smart contract and mint policy. According to data from CoinGecko, ApeCoin is down approximately 24% in the past 24 hours and down 12% since the Otherdeed NFT mint began.
Bored Ape co-founder Garga.eth admitted the Otherdeed mint was a “sour moment” for the NFT community.
“Needless to say tonight didn’t go how anyone wanted it to. I want to say sorry to the apes, and to everyone else who eagerly looked to join into the project,” he said on Twitter.
Yuga Labs also apologized for “turning off the lights on Ethereum for a while” and asserted that ApeCoin will “need to migrate to its own chain in order to properly scale.”
Following the chaotic mint, Lin Dai, CEO of NFT platform OneOf, had some stern words for Yuga Labs and Garga himself.
“Decentralization should never be used as an excuse for decisions of centralized venture-backed companies,” Dai said. “Time to take responsibility, be accountable to the community.”