With a virtual property sale, Yuga Labs disturbed Ethereum.
Due to the overwhelming demand for plots of land in the Yuga Labs multiplayer game, cryptocurrency has been suffocated by congestion.
After the auction of “metaverse land” in Yuga Labs generated a frenzy that temporarily overloaded the Ethereum cryptocurrency, a multi-billion dollar cryptocurrency corporation has apologized to users.
On Sunday, Yuga Labs, the company behind Jimmy Fallon’s and Paris Hilton’s favorite Bored Ape NFTs, announced the launch of its latest tokens, which represent plots of land in an upcoming multiplayer game called Otherside. Fifty-five thousand plots were sold for a fixed price of 305 ApeCoin (a Yuga-created currency), which is roughly £4,500 at current exchange rates.
We’re sorry for turning off the lights on Ethereum for a while. 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.
— Yuga Labs (@yugalabs) May 1, 2022
The demand for the plots was so great that it overloaded the Ethereum blockchain, which is one of the infrastructure layers that all cryptocurrency ventures rely on to function. As users competed to be one of the select few who could obtain an “Otherdeed,” transaction fees on the network increased to the point where a single NFT purchase cost more than £2,500 in fees alone. In addition to the £9,000 for the land, one user who successfully got two Otherdeeds paid a transaction charge of over 5 ETH (£11,000) to Yuga Labs. Others have lost thousands of pounds due to a failure to protect the tokens at all. If the user is out of money while paying transaction fees, the transaction will fail, but the costs will not be returned.
Also, read – A Comprehensive Guide to Autoglyphs NFT
The exorbitant costs paid by most individuals who purchased Yuga Labs’s latest token have paid off in the short term: tokens sold for £4,500 are now reselling for more than £9,000. People who were unlucky enough to be doing other cryptocurrency business at the same time, on the other hand, have suffered significant losses. Multiple cases of NFT sales worth less than £500 being slammed with transaction fees of more than £2,000 were monitored by Molly White, a cryptocurrency expert who maintains a site monitoring the sector.
“Gas fees, which rise in response to network congestion,” White noted, “have risen to frightening heights.” While the majority of sales on OpenSea, the most popular marketplace for NFTs, were for Otherside deeds, she said that “some people inexplicably continued to acquire and trade cheaper NFTs.”
Over $100 million was paid on transaction fees to purchase Otherside NFTs, with Yuga Labs receiving another $300 million in payments. The corporation apologized for the confusion it had caused after the sale was completed. “We know that the Otherdeed mint was unlike any other in terms of magnitude as a high-demand NFT collection and that this would present unique issues.”
“Despite the fact that this was the largest NFT mint in history by a factor of many, the gas used during the mint demonstrates that demand greatly beyond anyone’s wildest estimates.” The scale of this mint was so big that Etherscan, a cryptocurrency analytics website, broke,” Yuga noted. “We apologize for temporarily shutting off the lights on Ethereum.”
We are aware that some users had failed transactions due to the incredible demand being forced through Ethereum’s bottleneck. For those of you affected, we appreciate your willingness to build alongside us – know that we’ve got your back and will be refunding your gas.
— Yuga Labs (@yugalabs) May 1, 2022
The company has already experienced one setback as a result of the Otherdeed sale: a hacking attempt headed by a phony post on its hacked Instagram page advertising-free metaverse land resulted in the theft of $3 million in NFTs.
Some suggested that the repercussions of such a modest sale demonstrated that the cryptocurrency industry would struggle to scale in order to give services to the general public. “There’s a lot of buzz about web3’s potential.” However, every non-web3 sales method works with 100x fewer wasted costs at this rate,” noted Gergely Orosz, a notable technology critic. “If it’s too expensive to use or unstable, it’s at best alpha, not ready for mass use.”