The Mint That Broke Ethereum
It’s been a wild year for the BAYC, and this year has only just gotten started! Earlier on Saturday 30th April, Yuga Labs (the Creators of Bored Ape Yacht Club) finally opened the long-awaited land sale for their new ‘Otherside’ Metaverse. The following rush of participants generated over $300 Million through the sale of Otherside ‘Otherdeeds’, with investors quickly claiming the limited supply of 55,000 Otherdeeds.
Although, at the same time as the Mint, multiple scammers used phishing websites posing as an ‘Otherside NFT Airdrop’ page. Unfortunately, rather than getting to mint Otherdeeds, anyone who connected their wallet to the fake project page wound up losing large multiple NFTs.
In total, the loss is estimated at around $6 million, with crypto sleuth @zachxbt tracking 3 wallets tied to the fraud, with one of the thefts even being a Bored Ape. Needless to say, It wasn’t a fun experience for anyone who fell for the scam.
On top of that, while the event was definitely a huge win for Yuga Labs, it was more of a dumpster fire for everyone else, with the rush of activity propelling Ethereum’s (ETH) Gas fees into the stratosphere and launching one of the worst Gas Wars in Ethereum’s history, with some poor folks paying thousands of dollars for transactions that were only worth a few dollars each. The bottleneck the mint caused also significantly impacted other ETH-based services and even completely crashed Etherscan. Looking at the aftermath of that, Etherscan’s data suggested that over $150 Million was spent on gas fees for the Otherside mint alone. That’s not good for anyone, and the issue sparked much debate on twitter about Ethereum’s problems with scalability along with the lack of efficiency in Yuga Labs’ contract.
However, the firm did issue a public apology to users following the mint:
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 (@yugalabs) May 1, 2022
In the same statement, they also mentioned refunding gas fees to some users who had failed transactions along with the possibility of ApeCoin eventually migrating to its own chain (the beginnings of Apechain?). Although, it’s unclear how either of those will be done yet at this point in time.
The Bottom Line
Overall, the launch of Yuga Lab’s Otherside was a roaring success, but one that came with an extremely high cost and raised many issues regarding Ethereum’s long-term viability for projects. Though, with Ethereum’s 2.0 update looming, those performance issues could see much greater efficiency soon. However, the mint clearly showed the hype and demand for Yuga Labs’ new project were beyond anyone’s expectations. And with those lucky enough to have been able to mint an Otherdeed now being able to sell them on Opensea for over $15k, the gas prices might not look so bad compared to the profit.
Whether Yuga Labs moves ApeCoin to its own chain or not, the future definitely looks bright for Otherside’s unique metaverse experience. While the mint could be foreshadowing big changes for both ApeCoin and BAYC, one thing is still sure – collectors still want BAYC assets. The potential of a new blockchain for ApeCoin could make things a bit uncertain in the near future, but only time will tell whether the DAO will back this decision or not.