May 6, 2022 · less than 3 min read
Yuga Labs’ latest NFT auction didn’t quite go to plan.
Otherdeeds not words
By now, most of us have grown accustomed to the volatility of the NFT world. But when things go south, someone always has to foot the bill – and that’s exactly what’s happened in the latest round of NFT drama.
So, what’s the deal? Yuga Labs, creator of Bored Ape Yacht Club, managed to raise around $300 million on Saturday from a sale of Ethereum-based Otherdeeds NFTs, making it the biggest sale of its kind. Otherdeeds, for the uninitiated, are ‘digital land’ NFTs for Yuga Labs’ upcoming metaverse game, Otherside. And for a few hours at least, all seemed well…
What ensued was a serious botch job. Such an enormous sale bottlenecked the Ethereum blockchain, and sparked a surge in gas fees. These fees cover the costs of verifying a transaction on the blockchain, with any sum above these set costs going directly to the miners to incentivize them to speed up the transaction.
But in the hyper-exclusive world of NFTs and digital scarcity, NFT buyers have developed a habit of paying well over this amount to speed up their transactions. This is called a ‘gas fight’ and it can lead to desperate buyers paying exorbitant amounts in fees that can far outstrip the digital asset itself.
Despite efforts by Yuga Labs to prevent this from happening, the situation quickly spiraled. With more than $180 million in fees being burned, Ethereum quickly became congested, raising transaction costs for everyone buying NFTs – and not just those from Yuga Labs. The worst bit? Due to the fiasco, some of these people paid thousands in fees, and got nothing – not even an NFT.
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