Yuga Labs, the creator of the popular NFT collection Bored Apes Yacht Club, kicked off a virtual land sale related to its highly anticipated Metaverse project on Saturday, raising around $320 million in the biggest offering of its kind. Demand was so high that activity related to the event caused repercussions across the entire Ethereum blockchain, disrupting activity and driving up transaction fees.
Bored Ape Yacht Club NFT: An Overview
Last year, US startup Yuga Labs created Bored Ape Yacht Club NFTs, blockchain-based tokens representing a set of 10,000 computer-generated cartoon monkeys.
As non-fungible tokens (NFTs) – crypto assets that represent digital files such as images, videos or items in an online game – have exploded in popularity, Bored Ape prices have surged to hundreds thousands of dollars each.
What happened now?
Now Yuga Labs – which raised $450 million in March in a funding round led by Andreessen Horowitz – has set its sights on the so-called “metaverse”. During an online sale on April 30, Yuga Labs sold NFTs called “Otherdeeds”, which it said could be exchanged for virtual plots of land in a future Bored Ape-themed online environment called ” Otherside”. “Otherdeeds” could only be purchased using the cryptocurrency associated with the project, called ApeCoin, which was launched in March.
Holders of the ApeCoin cryptocurrency who have verified their identities have jockeyed to purchase deeds for 55,000 virtual plots of land at Otherside, the project’s planned metaverse game and the latest expansion in the Bored Ape franchise. Anticipation that interest would be strong in conspiracies – Ethereum-based NFTs called Otherdeeds – had driven ApeCoin’s price higher last week ahead of the selloff.
Each plot cost a buyer about $5,800 based on ApeCoin’s price of $19 on Saturday, plus transaction costs, or “gas fees,” to Ether, which skyrocketed after going live. sale as land grabbing attracted strong demand. Transaction costs just to mint Otherdeed NFTs after launch reached $123 million, with each Otherdeed requiring around $6,000, or 2 Ether, in transaction fees to mint, according to data from Etherscan – more than the price of the act itself.
Transaction fees are skyrocketing
“The sale of virtual land from Yuga Labs has triggered one of the biggest spikes in transaction fees on Ethereum,” said Jason Wu, founder of decentralized lending protocol DeFiner. “I’ve seen other NFT launches have high fuel costs, but this is definitely one of the highest.”
Minting a token or making a transaction on Ethereum requires token creators or traders to pay fees to those ordering transactions on the network. Transaction fees increase when the network becomes congested as more fees are required to prioritize a transaction. This can impact the Ethereum-based activities of apps like Uniswap, effectively slowing down transactions on these other platforms.
Yuga Labs originally planned for the sale to take place in a Dutch auction format in which the price of Otherdeed NFT would decline over time to prevent Ethereum from being burdened with high transaction fees. However, he then scratched the format and opted for another plan to limit the number of other stocks that can be bought per portfolio during each selling wave. The new plan failed to reduce the anticipated congestion. Yuga Labs apologized on Twitter for “turning the light out on Ethereum” and suggested the possibility of establishing an ApeCoin blockchain.
Who receives the money?
ApeCoins collected from the sale will be locked — meaning they cannot be sold, thereby reducing coins in circulation — for one year, according to Otherside’s Twitter account. A spokesperson for Yuga Labs on Friday declined to say who the money raised will go to, or if major ApeCoin holders including Andreessen Horowitz, Animoca Brands and others plan to participate in the sale of the land.
“Yes, we will also be buying,” Animoca’s Yat Siu said in a pre-sale email, adding that there are restrictions on the number of NFTs a single digital wallet can buy at different stages of the sale. of the land title.
In addition to the 55,000 Otherdeeds sold on Saturday, another 45,000 were awarded to holders of Bored Ape Yacht Club and Mutant Ape NFT, as well as Yuga Labs and other project developers, and another 100,000 tokens are expected to be awarded more late to some Otherdeed holders, according to the Otherside site. As the 55,000 Otherdeed NFTs were sold around midnight New York time, the process for BAYC and MAYC holders to claim their free Otherdeeds was initially delayed to avoid sending even higher gas charges. This unique claim was eventually reopened for these NFT holders when the gas charges were settled.
ApeCoin popularity is growing
ApeCoin is striving to become widely used in a variety of so-called web3 applications, using digital coins and blockchains. The idea is for owners to be able to access a variety of events, services, merchandise and games. It is also the governance token of ApeCoin DAO, whose board includes Reddit co-founder Alexis Ohanian, FTX’s Amy Wu, and Animoca’s Siu. Ahead of the Otherdeed sale on Saturday night, OpenSea said it would accept ApeCoin.
Venture capitalists who helped launch ApeCoin in March, including Andreessen Horowitz and Animoca, were among the biggest beneficiaries of ApeCoin, which was created as an “airdrop,” in which certain groups of Crypto holders automatically received 1 billion tokens as a reward. They and other launch partners received 14%, or 140 million tokens. ApeCoin’s price has nearly tripled since the coin’s release, according to data from CoinMarketCap.
The frenzy around the country stands in stark contrast to much of the crypto market, which has been trading sideways in recent months, with Bitcoin down around 18% year-to-date. Monthly sales volume on OpenSea, the world’s largest NFT marketplace, was higher in April than in March, but still down from its all-time high in January, according to data tracker Dune. While many apps have already sold virtual land for cryptocurrency, most have only seen a small number of users and transactions. On Decentraland, for example, the number of transactions has decreased by 35% in the past 30 days, according to data tracker DappRadar.