Bored Ape’s Land Sale Broke Ethereum. Extreme Success Or Roaring Failure?
On Saturday, April 30th, Bored Ape’s creators Yuga Labs broke Ethereum. Their new metaverse-inspired project, Otherside sold plots of virtual land to a roaring crowd of people yelling “Shut up and take my money!” In this case, the currency in question was the recently created ApeCoin. However, since Ethereum hosts ApeCoin and the land NFTs, the roaring crowd needed ETH to pay for the operations’ gas fees.
If you’re familiar with Ethereum, you already know what happened. According to IntoTheBlock’s Lucas Outumuro, “The Bored Ape’s Otherside land sale led to more fees being processed by Ethereum in three hours than in the previous two weeks.” Of course, all hell broke loose. The gas prices across the network went through the roof, many transactions failed causing people to lose their gas fees, and others just couldn’t afford to mint the NFT lands they were entitled to.
At the end of the day, the Otherside virtual plots NFTs, known as Otherdeeds, sold out. The Ethereum network pocketed around $125M just in gas fees. It didn’t survive the madness unscathed, though. Several Ethereum-based projects reported failed and/or slowed down operations and Etherscan, Ethereum’s block explorer, completely crashed. “We’re sorry for turning off the lights on Ethereum for a while,” Bored Ape’s creators Yuga Labs stated.
The Origins Of Otherside
Back in March, Yuga Labs raised an Andreessen Horowitz-led funding round of $450M to build Otherside. Apparently, it’s a Metaverse project in the vein of Decentraland and The Sandbox, but with a Play-To-Earn element built into it from the beginning. That same month, they created the now-defunct http://somethingisbrewing.xyz/ to ask people to KYC themselves and link their personal info to their Ethereum addresses.
Those registered addresses had the right to mint two plots of land in the Otherside playground. Bored Ape’s holders received two free plots each. There are a total of 55K Otherdeeds. To mint each one cost 305 ApeCoin, plus the Ethereum network’s gas fees. Even though it was expensive, considering Yuga Lab’s successful track record, it seemed like a steal.
Until the gas prices rose to unpayable levels, that is.
ETH price chart on FTX | Source: ETH/USD on TradingView.com
Bored Ape’s Creators Yuga Labs Speak
After selling everything, breaking everything, and leaving humble collectors land-less, the Bored Ape’s creators responded to the controversy with this brief Twitter thread.
We know that the Otherdeed mint was unprecedented in its size as a high-demand NFT collection, and that would bring with it unique challenges.
— Yuga Labs (@yugalabs) May 1, 2022
Among other things, Yuga Labs stated:
- Even though they took the mentioned KYC measures, too many people wanted in. “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.”
- Soon, ApeCoin will cease to be an Ethereum token and will become a full-fledged cryptocurrency. “It seems abundantly clear that ApeCoin will need to migrate to its own chain in order to properly scale. ”
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
- They will refund the gas fees of the operations that didn’t go through. “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.”
- In a posterior tweet, Yuga Labs announced that the gas-refunding process has already started. “Note that you do not need to do anything – we will transfer it all back to your wallet and announce when it is completed. Don’t click any links.”
We are still working on refunding all Otherdeed minters with failed transactions their gas. Note that you do not need to do anything – we will transfer it all back to your wallet and announce when it is completed. Don't click any links.
— Yuga Labs (@yugalabs) May 2, 2022
Even though it sounds like the Bored Ape’s creators are doing the right thing, its worth noting that the people receiving said refunds didn’t get to buy an Otherdeed NFT and the collection sold out. They can still get them in the secondary market at a premium, but the community is not pleased.
Bored Ape’s Users Speak
What follows is a narrow selection of opinions about the launch. Most of these people are Bored Ape’s rich and are heavily invested in the Yuga Labs ecosystem, but they’re worried. Let’s summarize what they said.
- According to Ap3father, “The drop went unbelievably poorly. That’s the truth of it all.” Plus, “this drop did nothing to help further the distribution of the already popular Yuga community … the same 27.5k people bought ..” However, he reflects, “Yuga Labs made me a millionaire. I am beyond spoiled, humbled, and blessed to be in this situation because of them.”
The drop went unbelievably poorly. That's the truth of it all. The initial thesis was that not enough KYC wallets exist for it to sell out in wave-1 .. not only was that incorrect … It sold out with 2+E in gas the entire way … a nightmare scenario …
— ap3father.eth (@ap3father) May 1, 2022
His conclusion is that “The community responded atrociously to this mint.” And his advice is to sell, “You may have millions in NFTs and that’s outstanding, but grab onto reality. When you die one day … they don’t bury you in the metaverse my friend. ” He has extra Bored Apes, though, so he’s not going anywhere. “I am excited to both sell some apes & continue my journey into the otherside.”
- For his part, Irish expressed suspicion. “How does the biggest innovators in the space not forsee a gas war? You literally have every address, identification of every KYC’d. Offer each KYCd 2 lands?” And tried to get Yuga Labs to honor their promise to sell him an Otherdeed, “We hear how you “make good” I’m thrilled you are paying failed transactions! Acknowledge your mint mistake.”
I spent 3 hours constantly refreshing and trying like many here. If you really want to spread to wallets let those KYC'd mint. We should've been given 2 weeks. And put on allowed mint list on contract. Similarly like Gary Vee did, Instead you chose PR nightmare.
— Irish (@Irishmikeys) May 2, 2022
- On the other hand, 3433 defended Yuga Labs. “Yuga let us mint BAYC for 0.08, they gave us Dogs to claim currently worth 9 ETH, they gave us free serums worth 57 ETH to drink or hold/sell which made Mutants, worth 30 ETH, they gave us 100-200k USD worth of $APE coin.”
Sure, maybe the mint could of gone better, we could of had a Cue/Raffle system, but at the end of the day every successful mint on ETH is a fucking shitshow, we all know this.
— 3433.eth 🍌 ☕️ (@boredape3433) May 1, 2022
Vitalik Buterin Speaks
- Last but not least, Ethereum’s creator Vitalik Buterin defended the Yuga Labs smart contract that governed the whole operation. “Regardless of contract details, tx fee goes up until list price + tx fee = market price. If gas usage per purchase decreased 2x, the equilibrium gas price would have just been >12000 gwei instead of 6000.”
Don't think optimizing the contract would help. Regardless of contract details, tx fee goes up until list price + tx fee = market price. If gas usage per purchase decreased 2x, the equilibrium gas price would have just been >12000 gwei instead of 6000.
— vitalik.eth (@VitalikButerin) May 1, 2022
Nevertheless, the Bored Ape’s creators seem pretty determined to create their own blockchain. Some people even suggest that they orchestrated this whole situation to justify and market it.
Featured Image: Bored Ape's metaverse Otherside logo from the site | Charts by TradingView