Over the course of the weekend the Ethereum blockchain was found to be unusable for hours because ofhigh volume of traffic generated by the launch of a new NFT group by Yuga Labs, the creator of the well-known collection of NFT Bored Ape Yacht Club (recently made headlines also for a millionaire scam). The new NFTs are virtual plots of land of Otherside, which Yuga Labs is developing. The metaverse real estate market has excellent growth prospects and is particularly sought after by those interested in grabbing portions of the new virtual spaces.
Therefore, the public response to Yuga Labs’ offer is not surprising, given the scale. The division of Otherside’s virtual lands, called Otherdeed, was arranged as follows:
The transactions for the assignment of the 55,000 lots put up for sale on Saturday caused the Ethereum blockchain to go haywire. Each NFT / lot cost around $ 5,840, or 305 Ape Coin, the cryptocurrency created by Yuga Labs for its metaverse which at the time of sale was worth $ 19.17 per single Ape Coin. There was no shortage of speculators who immediately moved to grab NFTs and resell them on OpenSea at higher prices, from 23,000 upwards.
It must be remembered that although the Otherdeed they are sold in ApeCoin they lean on the Ethereum blockchain for the management of so-called gas fees, transaction fees. The amount of commissions increases as the volume of transactions increases and, given the high demand for Otherdeed, it has reached very high levels with some buyers called to pay from 6,500 to 14,000 dollars for gas fees alone.
At one point the Ethereum blockchain raised the white flag and Yuga Labs was forced to apologize for inefficiencies caused: Sorry for turning off the lights on Ethereum for a while. It seems clear that ApeCoin will have to migrate to their own blockchain to scale properly. We would like to invite the DAO to start evaluating this avenue. The decentralized autonomous organization (DAO) to which Yuga Labs refers is the ApeCoin DAO, the person responsible for decisions relating to the ApeCoin community, which operates independently from Yuga Labs.
The effects of the blackout of the Ethereum blockchain, later solved, were not negligible:
- there were slowdowns in the transactions of services connected to Ethereum (eg Uniswap)
- The Ethereum transaction tracker, Etherscan, crashed
- some users report losing thousands of dollars in gas fees as part of unsuccessful transactions. However, Yuga Labs has stated that it will refund these fees.
In hours when nothing went as no one would have wanted it to go, to resume the comment of Greg Solano, one of the founders of Bored Ape Yatch, two aspects clearly emerged: on the one hand, the limitations of the blockchain and of the sales techniques of these new intangible assets, on the other hand the very high interest in the real estate market of the metaverse. Despite the inefficiencies on OpenSea, Otherdeed was sold for a value of 123 million dollars in just seven hours.