Biggest NFT Mint Goes Wrong! But Was It Deliberate?
This week, Bored Ape Yacht Club and Yuga Labs announced the opening of Otherside, a significant land sale for their metaverse. It is set to be the most expensive expansion of the Bored Apes universe to date. Otherside is a BAYC-connected MMORPG (Massively Multiplayer Online Role-Playing Game).
" Build something that expands the universe of the BAYC, but also invites the larger NFT community (and those priced out of BAYC membership) to join." the company stated.
Although nothing is known about the Otherside metaverse, the team has said that it would be an open metaverse RPG world compatible with other NFT projects like CryptoPunks, Mutant Ape Yacht Club, Cool Cats, and World of Women.
When was the Mint?
On April 30, at 9 p.m. ET, minting for the Otherside NFTs began on the official Otherside website. Because ApeCoin was the sole currency allowed as a payments system, the price to mint was a flat rate of 305 ApeCoin. However, you'll need to have enough ETH to cover any gas costs. There was a restriction of two NFTs per wallet at the start of the auction to guarantee a wide distribution of NFTs and to minimize outrageously high gas expenses.
To enter the mint, you must first KYC your wallet on somethingisbrewing.xyz. The auction was only opened to individuals who had completed their KYC. Holders of BAYC and MAYC could also claim an NFT for 21 days following the sale. To claim, holders must not be KYC-approved, but they must be KYC-approved to mint in the auction.
Otherside was supposed to be released in a Dutch Auction style at first (where a sale starts at a set amount and then drops over time to the final sale amount). However, Yuga Labs' team subsequently changed its minds and opted for an alternative method for the drop.
What Went Wrong?
The land auction was extremely popular, and Ethereum GAS FEES soared to levels not seen in previous months due to the NFT's high trading and minting activity. Many people on Twitter shared photos of their anticipated expenses, which ranged from $3,500 to $13,000.
People started outbidding each other for Otherside NFTs, ready to pay larger gas fees, driving the network's gas fees to roughly 8,000 gwei (a unit to measure gas on the Ethereum network). As a result, people have paid more than 64,700 ETH (more than $183 million) on transaction fees for Otherside NFTs alone, according to Etherscan statistics.
The mint earned more than $317 million for Yuga Labs, thanks to many eager participants. It sold 55,000 NFTs for 305 ApeCoins each ($5,800 at the time of mint). However, the entire operation put a massive strain on the Ethereum network, which processed these transactions, increasing transaction prices for all Ethereum-based projects.
What is Gas Fees?
Any activity that has to be recorded on the blockchain is charged a Gas Fee by Ethereum. The term 'Gas' refers to the amount of energy required by a miner to verify a blockchain transaction. The cost is dynamic, and it varies depending on the volume of transactions on the blockchain at the time.
You can pay additional gas fees to ensure that your transaction is approved first. However, like processing costs, you must pay the minimum gas fee at the moment, multiplied by the quantity of gas used in a specific transaction.
Many NFT buyers believe Yuga Labs could have created a more effective smart contract to save costs after seeing high gas prices. Smart contracts are lines of code on the blockchain that run when the terms of an agreement are satisfied.
NFT Worlds Co-Founder @iamarkdev suggested that the smart contract developers at Yuga Labs could have avoided using ERC721E numerable to save gas use by 60 percent to 70 percent each transaction.
According to Ethereum founder Vitalik Buterin, People would have paid higher costs for NFTs even if Yuga Labs optimized the smart contracts. He tweeted, "Don't think optimizing the contract would help. Regardless of contract details, tx fee goes up until the 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' Response
Yuga Labs said that the team did not foresee such a large demand for Otherdeeds NFTs until gas fees skyrocketed. They tweeted "We know that the Otherdeed mint was unprecedented in its size as a high-demand NFT collection, and that would bring with it unique challenges." they added "This has been the largest NFT mint in history by several multiples, and yet the gas used during the mint shows that demand far exceeded anyone's wildest expectations. The scale of this mint was so large that Etherscan crashed."
Yuga Labs said that Ethereum's constraints were to a fault and that ApeCoin, the company's token, would require its own chain. They tweeted, "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. We'd like to encourage the DAO to start thinking in this direction."
Yuga Labs also stated that it would reimburse Gas expenses to customers whose transactions were unsuccessful.
How Will The Fail Help Yuga Labs?
Given the company's clout in the Web3 industry as the designer of some of the most recognizable NFTs to date, future mints are sure to get a lot of attention.
ApeCoins is already planning to migrate to the firm's own blockchain, according to the firm.
With its existing infrastructure, Ethereum can perform 15-45 transactions, and when it switches to a proof-of-stake model, it will become significantly quicker. Polygon, an Ethereum-based blockchain, tweeted about offering Yuga Labs a method to deal with unstable mints. They said, "We have a *super* solution for you @yugalab to solve this problem. Polygon Supernets allows you to launch your own public dedicated yuga labs blockchain "
Yuga Labs can wait for this event, hoping for smoother mints in the future. Alternatively, it can switch to a different blockchain and ensure that the process of claiming NFTs does not leave a bad taste in people's mouths.