Yuga Labs’ entry into the NFT is seen as a major blow to Ethereum, which could open a $ 2.5 billion hole in the world’s leading blockchain.
The creators of Bored Apes NFT and apecoin caused a significant surge in transaction fees on the Ethereum Network, called gas charges, when they began selling land in The Otherside Metaverse on May 1.
A total of 55,000 virtual pieces on sale Metaverse The land was sold at a list price of 305apecoin, a currency created by Yuga, which was worth about $ 7,000 at the time of the event.
Demand for Yuga Lab’s latest NFT products has suffocated the Ethereum network and soared gas prices, allowing an individual to trade $ 44,000 in ether to drive the sale of a virtual land worth about $ 7,000. I paid the fee.
Immediately after the sale, Yuga Labs issued a statement that further undermined Ethereum’s status.
The company behind Boring Ape NFTPurchased by celebrities such as Jimmy Fallon and Paris Hilton, has announced that it will remove Apecoin tokens from Ethereum’s mainnet to its own native chain in response to soaring transaction fees. This removal of Apecoin could leave $ 2.5 billion in the Ethereum ecosystem.
The Yugarabo relocation is a direct reaction to the experience of high gas prices on sale, and they said why behind the Yugarabo relocation.
The Ethereum blockchain can only support about 30 transactions per second. Therefore, as transactions grow in size, there will be congestion of open payments. Gas charges are additional charges that users pay to Ethereum miners to prioritize transactions.
As a result, first-come-first-served purchase frenzy, such as the Yuga Labs Otherside Metaverse Sale, has seen a surge in the amount paid to miners to boost sales.
The Ethereum gas tariff blunder that lasted May 1 negatively affected public perceptions of the world’s second-largest cryptocurrency.
There was also a knock-on effect felt by other users of the Ethereum network who were not involved in launching the NFT.
They also experienced excessive transaction fees, with one user reporting a gas charge of $ 1,700 to send $ 100 from one wallet to another.
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The land sale in The Otherside Metaverse sold out within minutes, selling over $ 200 million in virtual real estate, and the cost of each parcel of land was 305 Apecoin, which was about $ 2.7k at the time of writing.
Individuals who were able to pay excessive gas charges and create otherside NFTs quickly enough turned over the virtual land certificate on the OpenSea NFT platform for over $ 15,000 and made a profit of $ 10,000.
But in line with the current recession Cryptographic market Many otherside NFTs are currently below the original mint price.
The company described the event as “the largest NFT mint in history” and the purchase was made in the recently launched Ethereum-based cryptocurrency, Apecoin.
Cryptographic analysts told Yahoo Finance WillPapper last Tuesday that a surge in transaction fees during the sale of NFT land could be avoided. Syndicate DAO It emphasized the need to view the event as a learning curve that “needs to develop mechanized designs of other forms of mint.”
However, the fallout from the Yuga Labs event is only included in the valuable BAYCNFT brand, as the long-term scalability issues associated with Ethereum have attracted more people’s attention due to the high cost of gas charges. I didn’t. Communication network.
The event robbed most small private investors operating within the crypto ecosystem of $ 170 million in gas charges and handed them directly to Ethereum miners verifying each transaction. The fact that it shakes the spirit of Ethereum as a decentralized, egalitarian and democratic ecosystem.
As a result, a costly process revealed some unpleasant family truths about the basic design of Ethereum itself.
The inability of Ethereum to keep transaction fees at affordable levels when experiencing large-scale use is at odds with what founder Vitalik Buterin once said.
However, Ethereum is trying to solve the permanent transaction fee issue with an upgrade to Eth 2.0, but this date continues to be postponed.
Ethereum has decided to prioritize the transition from a proof-of-work consensus mechanism to a less energy-intensive proof-of-stake consensus mechanism at the expense of implementing sharding on the blockchain.
Sharding dramatically improves the scalability issues that blockchain visibly experienced when launching YugaLabs NFT.
The gas tariff blunder highlighted the benefits of rivals and alternative blockchains such as Solana and Cardano.
Solana’s scalability keeps all transactions under $ 0.01 and transaction speeds as high as 400 ms per block. However, in line with the “blockchain trilemma,” Solana can claim to have sacrificed security in favor of successful scalability.
Currently, Ethereum can only process about 13-15 transactions per second, with an average transaction fee of $ 42 in April.
Immediately after the disastrous sale of the NFT, another shot occurred across the Ethereum bow. YugaLabs has announced that it will remove Apecoin tokens from Ethereum’s mainnet to its own native chain in response to the surge in transaction fees.
This removal of Apecoin could leave $ 2.5 billion in the Ethereum ecosystem.
Yuga Labs, who also acquired the CryptoPunks and Meebits NFT collections, apologized for the episode, but the tone of their reaction came across as patronizing and dishonest, losing much in Ethereum gas rates and feeling private investors. A blow from the sharp drop in Apecoin after the event that caused anger from the corps.
Investors had to buy Apecoins to buy virtual land at the NFT launch.
After the event, Yuga Labs tweeted. “I’m sorry to turn off the Ethereum light for a while.
“It’s pretty clear that you need to move apeCoin to your own chain to scale properly.
“I want to encourage DAO to start thinking in this direction.”
Former Wall Street Bunker, citing speculation that Yuga Labs will create its own blockchain Brian rose He told Yahoo Finance: “”
CEO London real YouTube channel to immediately discuss crypto with “Real Wolf on Wall Street” Jordan BelfortAddition: “When the general public sees these ridiculous gas prices for simple NFT mint, Ethereum is forced to innovate faster.
“We also generally emphasize that other protocols, such as Solana, AVAX, and Tezos, are already much faster and reduce transaction costs. And it is a great deal of money and usefulness to provide alternative solutions. It means that there is sex. “
It’s easy to get an ironic view of last Tuesday’s event. There, a privileged holder of expensive photographs of cartoon apes received free land in a virtual multiplayer game. However, the rest of this virtual land was generally put up for sale, causing a desperate FOMO bottleneck for desperate buyers who were forced to pay more and more at Ethereum gas rates to speed up transactions. ..
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The sarcastic pointed out details of the NFT launch last Tuesday, with some paying a transaction fee of $ 44,000 to buy pixelated 3D images of essentially $ 500 in a multiplayer computer game. .. This economic exchange will go against the common sense of everyday life.
This could easily lead to the conclusion that Yuga Labs’ NFT land sale was the highest level of a period of mass hypnosis that never lasted.
The sale of land on Otherside NFTs can be an important moment when the entire NFT cardhouse begins to collapse.
Or, in retrospect, we can see that early buyers of Yuga Labs’ Metaverse were ahead of the curve and invested in an ecosystem that might have to migrate at some point in the future. ..
Yahoo Finance has contacted Yuga Labs and Ethereum about an answer to the gas tariff issue and plans to move apecoin to its own blockchain, but they haven’t responded to the request yet.
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