Yuga Labs has opened the long-awaited land sale for their new Otherside metaverse. The NFT mint sparked a gas war that wasted millions and clogged up Ethereum resulting in failed transactions
Otherside Metaverse NFT Mint Broke Ethereum
The BAYC has had a wild year so far, and it’s only the beginning of the season! Yuga Labs (the creators of Bored Ape Yacht Club) had previously opened the long-awaited land sale for their new ‘Otherside‘ Metaverse, which are NFTs for digital land related to an upcoming “metaverse” gaming project on Saturday, April 30th.
The subsequent rush of participants generated over $300 million from the sale of Otherside’s “Otherdeeds,” with investors snapping up the limited supply of 55,000 Otherdeeds, but the blockchain became bottlenecked, burning nearly $200 million in Ethereum as prices and transaction fees skyrocketed after the NFT mint.
Several scammers used phishing websites to pose as an “Otherside NFT Airdrop” page at the same time as the NFT Mint. Unfortunately, instead of minting otherdeeds, anyone who connected their wallet to the fake project page lost a large number of NFTs.
Worst Gas War In Ethereum’s History
Yuga Labs only sold wallets belonging to people who registered their personal information before April 25. Buyers were expected to pay $5,800 per NFT, plus fees because APE was worth $19. The sale’s proceeds would then be removed from circulation for a year.
Furthermore, while the event was a huge win for Yuga Labs, it was a dumpster fire for everyone else, with the flurry of activity sending Ethereum’s (ETH) gas fees into the stratosphere and igniting one of the worst gas wars in Ethereum’s history, with some poor people paying thousands of dollars for transactions worth only a few dollars each.
The mint’s bottleneck had a significant impact on other ETH-based services and even brought Etherscan to a halt. Looking at the aftermath, Etherscan’s data revealed that the Otherside NFT mint alone spent over $150 million on gas fees.
That’s not good for anyone, and the issue sparked a lot of discussion on Twitter about Ethereum’s scalability issues and Yuga Labs’ contract’s inefficiency.
Gas fees, which cover the computational cost of verifying transactions within Ethereum’s proof-of-work protocol, were the main issue for the Otherside NFT mint.
The “base fee” of a transaction is burned—or sent to a dead-end address—in Ethereum’s current iteration, with any extra tip going to the miner to incentivize faster confirmation.
These fees can skyrocket in the days leading up to high-demand events when people expect transactions to be completed quickly. In such cases, “gas wars” may break out, with gas fees rising as more users join, raising transaction fees for everyone using Ethereum and bottlenecking the network.
Yuga Labs considered this possibility when designing the Otherside mint, considering a “Dutch auction” approach before deciding that “Dutch auctions are bullshit.”
To avoid Ethereum being bottlenecked, the project chose a flat price, limited availability to KYC’d wallets, and an “enforced limit of 2 NFTs per wallet at the start of the sale” that would eventually increase.
64, 219 ETH Was Burned On Transaction Fee
As soon as the sale began at 9 p.m. ET, a gas war erupted. According to Etherscan, 64,219 ETH was burned on transaction fees over the weekend, equating to over $180 million at today’s prices, the majority of which is now gone forever due to Ethereum’s burn.
Aside from the massive amount of resources wasted as a result of this project, transaction fees on the Ethereum network have skyrocketed.
Exorbitant fees affected people buying NFTs from different projects, often outstripping the underlying asset, according to a Twitter thread by Molly White, creator of Web3 Is Going Great: a $3,500 fee for a $500 NFT, a $3,800 fee for a $270 NFT, a $3,950 transaction fee for a $260 NFT, and a $3,300 transaction fee for a $25 NFT were just some of the many ridiculous trades executed during the gas war caused by Otherdeed’s NFT launch.