Yuga Labs, the creator of the popular Bored Apes Yacht Club (BAYC) non-fungible token (NFT) collection on April 30 revealed the Otherside metaverse digital land sale which raised roughly $320 million (roughly Rs. 2,450 crore) — making it the largest NFT mints to date through the sale of virtual land. Yuga sold 55,000 blocks of land in its “Otherside” virtual world, which has yet to launch. Ownership of virtual land, issued as NFTs known as “Otherdeeds,” was sold directly by Yuga for a flat price of 305 ApeCoin, valued at about $5,800 (roughly Rs. 4.45 lakh).
There was an unprecedented problem with Ethereum that followed. After the sale, because ApeCoin both resides on the Ethereum blockchain and sells the Otherdeeds on secondary markets such as OpenSea, the “gas fee” or transaction processing cost in Ether shot up to about ETH 2.6 or $7,000 (roughly Rs. 5.35 lakh) per transaction.
The way gas fee works on the Ethereum network is that the higher the bid in Ether, the quicker the transaction is processed. The problem with the Otherverse NFT drop is that suddenly tens of thousands of additional people were on the Ethereum blockchain, bidding to have their transactions go through.
The spike in gas fee resulted in a host of bizarre situations. As per a report by The Verge, some purchases of Otherdeeds cost between ETH 2.6 to ETH 5 ($14,000 or roughly Rs. 10.7 lakh) in gas fees alone — more than the cost of the NFT – and by the time the virtual land deeds sold out, buyers had paid a total of about $123 million (roughly Rs. 940 crore) just to execute their transactions on the Ethereum blockchain.
The spike in Ethereum gas fees resulted in Yuga offering an apology on Twitter while noting that ApeCoin may need to move to its own blockchain.
We are aware that some users had failed transactions due to the incredible demand being forced through Ethereum’s bottleneck. For those of you affected, we appreciate your willingness to build alongside us – know that we’ve got your back and will be refunding your gas.
— Yuga Labs (@yugalabs) May 1, 2022
Yuga Labs made headlines in March when it raised $450 million (roughly Rs. 3,430 crore) in new funding on a $4 billion (roughly Rs. 30,475 crore) valuation from Andreessen Horowitz’s a16z crypto, Animoca Brands, The Sandbox, LionTree, Sound Ventures, Thrive Capital, FTX, and MoonPay.
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