ETH gas price surges as Yuga Labs cashes in $300M selling Otherside NFTs

While the community was witness to the largest nonfungible token (NFT) mint yet, Ethereum gas prices rose to unprecedented levels, in addition to users experiencing failed transactions due to blockchain bottlenecks.

Bored Ape Yacht Club creator Yuga Labs launched a sale of Otherdeed nonfungible tokens that represent digital land deeds on their new venture, the Otherside metaverse. With each piece of land selling at 305 ApeCoin (APE), or nearly $5,800 at the time of the sale, Yuga Labs made $319 million after 55,000 NFTs sold out almost instantly.

The Otherdeed NFT mint is sold out - we are awestruck at the demand shown tonight. Apes and Mutants, the opening of the 21-day claim period is being delayed until the price of gas drops to reasonable levels. We’ll tweet when the claim opens. https://t.co/iRz64lklbv

— OthersideMeta (@OthersideMeta) May 1, 2022

While the Otherdeed NFTs could be minted only in APE, it also required Ether (ETH) for gas fees. The minting mechanics set by Yuga Labs envisioned the sale of NFTs in phases while anticipating a momentary rise in gas prices, which would then decelerate the number of users minting the NFTs:

“This pattern of mint → bump limit → mint → bump limit will continue until NFT supply is exhausted. This approach is expected to prevent an apocalyptic gas war, while also encouraging as broad a distribution as possible.”

The above screenshot was shared by Redditor u/jeux99 sharing their experience with high gas fees at the time, asking:

“Why is gas $450 right now??? I’ve seen high gas fees, but nothing like this before!”

As rightly pointed out by another Redditor, u/johnfintech, Etherscan data shows that numerous users paid anywhere between 2.6 ETH, or $6500, to 5 ETH, or $14000, as gas fees.

Citing some of the issues related to using Ether during its NFT launch, Yuga Labs stated:

“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.”

For those that lost their ETH holdings in gas due to failed transactions, Yuga Labs has promised to refund the gas amount back to the users.

Related:Vitalik Buterin proposes calldata limit per block to lower ETH gas costs

Ethereum’s infamous gas fees have been a long-standing concern among the community owing to the influx of ecosystems hosted by the blockchain, including NFTs.

In November 2021, Ethereum co-founder Vitalik Buterin proposed a new block-wide limit on the total transaction call data to decrease the overall transaction call data gas cost over the ETH network.

While the community embraced the suggestion, it took over four months to implement EIP-4488 on the Ethereum-sidechain testnet on Geth. Community member Qi Zhou confirmed on Wednesday about plans to upgrade the testnet within a month.