BAYC Team Raised $285M with Otherside NFTs and Clogs Ethereum
After much ado, Yuga Labs held its long-awaited digital land sale on Saturday evening — a public debut for its “Otherside” metaverse project. The company generated approximately $285 million from the land rush, but it also created some the highest gas fees ever recorded on the Ethereum network. Investors have been paying these high fees. spent over $176 million on fees alone in the past 24 hours.
Otherside is the largest product launch by the company most well-known for its Bored Ape Yacht Club NFT (nonfungible token collection) creation. 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 $7000 each, and were only available for purchase in ApeCoin (APE), Yuga Labs’ official cryptocurrency. OpenSea lists the lowest price for an Otherdeed at $7000. 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.)
In the wake of fee-related chaos, the company issued a public apology:
“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.”
The statement also mentions the possibility that traders could be reimbursed for their gas fees. However, it isn’t yet clear how this process would look.
The average transaction fee for Ethereum transactions scales with network congestion. When traders try to get the same tokens simultaneously, prices rise. everyone. It’s a phenomenon known as a “gas war” — users compete to have their transactions processed at the top of the miners’ queue.
For 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 DAO — maybe it can donate some of last night’s windfall to the cause.