The NFT Land sale conducted by Yuga Labs might have been the biggest ever sale on the blockchain. With 55,000 Otherseeds (NFTs) available for sale, it has broken all the records for fastest sale and the highest number of Ethereum burned.
It became so phenomenal that the blockchain network practically crashed. Not literally, but it indeed got delayed. As a result? People ended up paying way more than what they had bargained for.
You would think that’s the worst part, but there’s more. They had to wait in a queue for hours. Many didn’t even receive their NFTs despite meeting the requirements.
And what does Yuga Labs have to say about it?
Well, they blamed it on Ethereum’s failure and claimed to introduce a custom, Yuga Lab’s unique blockchain network for the future. And did the users take lightly to these comments? Not at all. Let’s dig deeper to learn more:
What Was The BAYC NFT Land Sale?
Yuga Labs is the creator of the most successful NFT project known as The Bored Ape Yacht Club (BAYC). After the huge success, the team decided to work on building a Metaverse project, a game known as Otherside. It would connect all the projects by Yuga Labs on the blockchain and provide added values.
Otherside came with virtual land NFTs, known as Otherdeed. There were a total of 200,000 Otherdeed NFTs available. They were to launch in two different sales, 100,000 each. The first sale took place on 30th April 2022. There were 55,000 Otherdeeds available for people to purchase. The remaining 45,000 were sent to the stakeholders on the blockchain as an airdrop, which is justified.
The Initial Cost – And The Unprecedented Mishaps
The initial cost of Otherdeed (The NFT Land) was supposed to be around 305 ape coins which were approximate between $5,800 and $6,000, depending on the value at the time. The Ape coins were another cryptocurrency generated by Yuga Labs for their metaverse infrastructure. At the time of sale, a single ape coin was around $19.17.
The sale was one of the fastest, and people brought $300 million worth of Otherdeeds in a single go. Unfortunately, they also decided to list their newly bought NFT lands on secondary markets places. These included popular Ethereum markets like OpenSea.
Those who couldn’t get their hands on the first line of NFT land sales decided to hop to OpenSea and purchase them. This increased the load on the Ethereum blockchain. The secondary marketplace also increased the price of these lands to around $20,000 to $30,000 apiece.
Twitter Didn’t Waste Time To Blame
Several users were up in arms after Yuga Labs announced that they would work on their blockchain for the users. They blamed Yuga Labs for the incompetency and failure to look into the problems. Which isn’t wrong, as Yuga Labs could have handled it better, but could you blame them? Many users have shown their disappointment as the Gas fees increased.
Should We Blame Yuga Labs?
Before the sale, Yuga Labs considered all the outcomes. They even planned on the Dutch auction sales. However, they wanted to keep things fair and made the NFTs available for wallets with KYC confirmed. There was also a limit of 2 NFTs per wallet.
They even provided airdrops to other holders of NFTs, reducing the overall load on the blockchain.
For this unprecedented error, they have even decided to ensure refunds to people who didn’t receive their NFTs. Even though their payments and transitions went through. What more could you ask?
The Gas Fees Wars Is The One To Blame
We have already seen many NFT projects, including games, fail due to increasing gas fees. The popularity of the Otherdeeds sales was impossible to contain. The bottleneck was bound to happen. As a result, over $200 million worth of Ethereum was burned.
Yuga Labs is not responsible for the hike in the gas fees. It all depends on Ethereum’s protocols, including the transaction verification and proof-of-work protocol.
Gas Wars occur when users try to pay extra and use extra gas fees for faster transactions. It has nothing to do with Ethereum. However, in the long run, it impacts the overall cost of Ethereum.
Since the users couldn’t have been patient enough, Gas wars emerged, and over $180 million in Ethereum, closing to $200 million, was burned.
The Bottom Line
Although this isn’t an analysis, the fault was on both sides. It wouldn’t have happened, if users hadn’t overloaded secondary markets immediately and instead, patiently waited for the NFT sales. They also partook in gas wars, for which Ethereum wasn’t prepared for it. So, the initial blame comes to the users for their loss. But not everyone was responsible. Some just wanted back what they started with. Yuga Labs has decided to compensate them for it. What more could you ask?
We can only hope that such incidents won’t occur in the future.