BAYC Team Raises $285M With Otherside NFTs, Clogs Ethereum

The virtual land rush for the ape-centered metaverse project has already cost traders more than $176 million in fees alone.

May 1, 2022 at 3:31 p.m. UTC
Updated May 2, 2022 at 7:11 p.m. UTC

Will Gottsegen is CoinDesk's media and culture reporter. He holds ETH and two NFTs above CoinDesk's disclosure threshold of $1000.

Eli is a news reporter for CoinDesk. He holds ETH, SOL and AVAX.

After much ado, Yuga Labs held its long-awaited digital land sale on Saturday evening – a public debut for its “Othersidemetaverse project. While the resulting land rush generated roughly $285 million for the company, it also created some of the highest gas fees in the history of the Ethereum network: Investors have spent over $176 million on fees alone in the past 24 hours.

Otherside is the biggest product launch yet from the company best known for creating the Bored Ape Yacht Club non-fungible token collection. During last night’s sale, traders snapped up a limited supply of 55,000 “Otherdeeds” NFTs, which represent titles to plots of virtual land in a forthcoming 3D social space.

They cost about $7,000 each, and were only available for purchase in ApeCoin (APE), Yuga Labs’ official cryptocurrency. On secondary marketplaces like OpenSea, the cheapest listed price for an Otherdeed was around 7 ETH (roughly $19,000) at publication time.

The night was a win for the firm, which previously raised $450 million from venture capital giant Andreessen Horowitz, and a kind of slow-burning disaster for everyone else. (The Otherside raise was worth even more last night – around $320 million – but the value of APE has since fallen.)

The company issued a public apology in the wake of the fee-related chaos:

“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,” reads a statement posted to Twitter. “We're sorry for turning off the lights on Ethereum for a while.”

Credit: Etherscan

The statement also gestures at the idea of refunding traders' gas fees, though it's not yet clear what that process would look like.

The average fee for an Ethereum transaction typically scales with the overall congestion of the network; when traders scramble for the same tokens at the same time, prices go up for everyone. It’s a phenomenon known as a “gas war” – users compete to have their transactions processed at the top of the miners’ queue.

Per a bespoke calculator on the blockchain data site Dune Analytics, the average gas price was hovering around 800 Gwei early Sunday morning, with spikes in the realm of 6000 and 7000. During these waves, a simple transaction (say, sending a few dollars’ worth of crypto to a friend) could cost upwards of $3,000.

The expensive evening threw into question Ethereum’s long-term viability as a host for large-scale NFT projects; Yuga Labs even floated the idea of building its own dedicated blockchain at the end of its apology thread:

“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.”

Of course, the firm has taken great pains to assert that it doesn't actually control the ApeCoin decentralized autonomous organizatrion – maybe it can donate some of last night’s windfall to the cause.

The Festival for the Decentralized World
Thursday - Sunday, June 9-12, 2022
Austin, Texas
Save a Seat Now

DISCLOSURE

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.

Will Gottsegen is CoinDesk's media and culture reporter. He holds ETH and two NFTs above CoinDesk's disclosure threshold of $1000.

Eli is a news reporter for CoinDesk. He holds ETH, SOL and AVAX.

Will Gottsegen is CoinDesk's media and culture reporter. He holds ETH and two NFTs above CoinDesk's disclosure threshold of $1000.

Eli is a news reporter for CoinDesk. He holds ETH, SOL and AVAX.

Trending

1
Nansen Acquires DeFi Portfolio Tracker Ape Board for More Than $10M

Nansen plans to combine its analytics with Ape Board's portfolio tracking to make the "definitive information super app of Web 3."

Nansen plans to combine its analytics with Ape Board's portfolio tracking to make the "definitive information super app of Web 3."

2
Terraform's Legal Team Quits Amid Terra Stablecoin Fallout

Marc Goldich, Lawrence Florio and Noah Axler left the Terra ecosystem backer in May according to their LinkedIns.

Marc Goldich, Lawrence Florio and Noah Axler left the Terra ecosystem backer in May according to their LinkedIns.

3
Robinhood Plans ‘Web 3’ Crypto Wallet for DeFi Traders, NFT Buyers

Robinhood’s new custodial wallet will cater to “advanced” crypto users and live separately from the existing wallet, the firm’s Johann Kerbrat said.

Robinhood’s new custodial wallet will cater to “advanced” crypto users and live separately from the existing wallet, the firm’s Johann Kerbrat said.

4
Blockchain Investment Firm Fortis Digital Raising $100M Fund

The fund focuses on altcoins and requires potential investors to have a minimum $2.5 million net worth.

The fund focuses on altcoins and requires potential investors to have a minimum $2.5 million net worth.