ETH gas price surges as Yuga Labs cashes in $300M selling Otherside NFTs
While the community was witness to the largest NFT mint yet, Ethereum (ETH) gas prices rose to unprecedented levels, in addition to users experiencing failed transactions due to blockchain bottlenecks.
Bored Ape Yacht Club creator Yuga Labs launched a sale of Otherdeed non-fungible tokens (NFTs) that represents digital land deeds on their new venture, the Otherside metaverse. With each piece of land selling at 305 ApeCoin (APE) or nearly $5,800 at the time of the sale, Yuga Labs made $319 million after 55,000 NFTs sold out almost instantly.
The Otherdeed NFT mint is sold out – we are awestruck at the demand shown tonight. Apes and Mutants, the opening of the 21-day claim period is being delayed until the price of gas drops to reasonable levels. We’ll tweet when the claim opens. https://t.co/iRz64lklbv
— OthersideMeta (@OthersideMeta) May 1, 2022
While the Otherdeed NFTs could be minted only in APE, it also required ETH for gas fees. The minting mechanics set by Yuga Labs envisioned the sale of NFTs in phases while anticipating a momentary rise in gas prices, which would then decelerate the number of users minting the NFTs:
“This pattern of mint → bump limit → mint → bump limit will continue until NFT supply is exhausted. This approach is expected to prevent an apocalyptic gas war, while also encouraging as broad a distribution as possible.”
The above screenshot was shared by Redditor u/jeux99 sharing their experience on high gas fees at the time, asking:
“Why is gas $450 right now??? I’ve seen high gas fees, but nothing like this before!”
As rightly pointed out by another Redditor, u/johnfintech, Etherscan data shows that numerous users paid anywhere between 2.6 ETH ($6500) to 5 ETH ($14000) as gas fees.
Citing some of the issues related to using Ether during its NFT launch, Yuga Labs stated:
“We’re sorry for turning off the lights on Ethereum for a while. It seems abundantly clear that ApeCoin will need to migrate to its own chain in order to properly scale.”
For those that lost their ETH holdings in gas due to failed transactions, Yuga Labs has promised to refund the gas amount back to the users.
Ethereum’s infamous gas fees have been a long-standing concern among the community owing to the influx of ecosystems hosted by the blockchain, including NFTs.
In Nov. 2021, Ethereum co-founder Vitalik Buterin proposed a new block-wide limit on the total transaction calldata to decrease the overall transaction calldata gas cost over the ETH network.
While the community embraced the suggestion, it took over four months to implement EIP-4488 on the Ethereum-sidechain testnet on Geth. Community member Qi Zhou confirmed on 27th April about plans to upgrade the testnet within a month.