Soaring Gas, Simmering Suspicion, and 50,000 NFTs: Inside Yuga's Zany Metaverse Mint

Ungodly hype creates ungodly expectations.

That’s what happened when Yuga Labs, the creators of Bored Ape Yacht Club, launched the balleyhooed mint of their Otherside NFTs on May 1.

Yuga, which is worth $4B, raised hundreds of millions of dollars from the mint of 50,000 NFTs called Otherdeeds. They were designed to let owners claim land in Otherside, Yuga’s forthcoming metaverse world. Yet the sale, with soaring gas prices, thousands of failed transactions, and profuse apologies made the offering instantly infamous. There were plenty of unhappy customers.

“They managed to do terribly in both the minting process and the ‘sorry’ thread aspects,” hildobby, a data scientist who builds Dune Analytics dashboards, told The Defiant.

Bored Apes Floor

In the wake of the stormy mint, Bored Apes and associated assets haven’t been doing too well. APE, the newly introduced token, is down 7.7% in the past 24 hours compared to a 0.4% slip by ETH. The floor for Bored Apes NFTs has skidded 24% since Sunday, according to CoinGecko.

There was certainly no shortage of interest in Otherdeeds NFTs. On the day of the mint, Ethereum gas, which is the amount of ETH required to send transactions and fluctuates based on demand, spiked to levels not seen since Sept. 2020, according to Etherscan.

Average Ethereum Gas Price Over the last three years. Source: Etherscan

Users who successfully minted Otherdeeds appear to have made a good choice so far — the mint price was 305 APE, worth $4,593, and the floor for Otherdeeds is 4 ETH, worth $11,436, according to OpenSea.

And some people won big — the “Koda” trait, visualized with a small creature on a plot of land, has a floor of 20 ETH, according to OpenSea.

Otherdeed 53429 with a Koda.

Of course that doesn’t include the insane gas fees users paid to complete their transactions. In total, 60,234 ETH was used, over $170.8M dollars, to mint the Otherdeed NFTs, according to a Dune Analytics dashboard by hildobby. That means users were spending well over an ETH, worth $2,842, simply in gas on top of the $4,593 in APE, to get their Otherdeed.

There were other casualties as well — 14,285 transactions failed across 11,828 wallets, according to a Dune Analytics dashboard by Sea Launch, an NFT platform. In total 1,653 ETH, worth $4.7M was lost due to failed transactions.

Yuga has since apologized for the insane gas spike as well as the failed transactions in a thread on Twitter. The company said it plans to refund the gas of all users who had a failed transaction in the thread.

Hildobby, the Dune Analytics data scientist, said the process was so unwieldy that maybe there was more to it than just a sale.

“Demand was definitely there,” the data scientist said of the mint, “but I really don’t like that they (I’m pretty sure purposely) clogged up Ethereum for three hours to later make an add on how it needs apechain to scale.”

Indeed, in Yuga’s post mortem regarding the mint, the company encouraged ApeCoin’s governance to pursue creating its own chain.

Hildobby wasn’t alone in voicing his suspicion that Yuga knew the gas fees would get out of control before the mint and didn’t do its best to mitigate the problem. Andy Chorlian, the founder of Fractional, which allows for NFTs to be fractionalized and traded, tweeted a similar statement and received three thousand favorites.

The introduction of ApeChain introduces another project into the long line of hyped launches by Yuga. The company seems to maintain a constant stream of new announcements on the horizon, whether it’s new NFTs like Mutant Ape Yacht Club, merch drops, ApeCoin, or Otherdeeds, which culminated in the weekend’s mint. Now the next thing may be ApeChain.

To be sure, traditional businesses constantly are shipping new products and experiences. As NFTs generally derive their value from cultural importance, which translates into eyeballs, it seems especially important that Yuga always has a major release on the horizon.

Massive Burn

Still, hildobby hasn’t given up on Yuga’s creativity. “I’m interested to see how their multiverse will play out,” the data scientist said. “They have a really good track record overall in terms of creating value so I’m sure it will generate a lot of traction.”

Having just raised $450M in a round led by Andreessen Horowitz, Yuga certainly has enough money to attract developers to build their own blockchain.

Not everyone is angry about the mint’s results. Thanks to EIP-1559, which generally burns the majority of the ETH comprising transaction fees on Ethereum, over 55,421 of the digital asset was destroyed, according to Anthony Sassal, the Ethereum-focused educator.

A record for burned ETH on May 1. Source: Watch the Burn

In total, the amount of ETH spent on transactions led to easily the largest amount of the digital asset burnt since EIP-1559 was implemented.

ETH holders weren’t the only ones rejoicing. OpenSea processed $476M in NFT trading volume on May 1, according to a Dune query by Richard Chen, general partner at VC firm, 1confirmation.

Daily volume on OpenSea (Ethereum). Source: Dune Analytics

The dramatic volume spike was primarily due to people trading for Otherdeeds on the secondary market, leading to OpenSea hitting what Chen’s colleague Kofi Kufour tweeted was a record for the platform.

In all, the crypto community is still reeling from the May 1 mint, which, if anything, gave people something to digest during what may be an extended bear market. Ap3father.eth, as the Bored Ape holder goes on Twitter, is seeking a middle path.