The largest and most anticipated NFT mint of all-time happened Saturday night with the launch of Otherdeed for Otherside from Yuga Labs. The NFTs are tied to Otherside, a metaverse being built by the parent company of Bored Ape Yacht Club. The mint didn’t go as smoothly as planned and has Ethereum (CRYPTO: ETH) founder Vitalik Buterin chiming in.
What Happened: Large demand for Otherdeed led to high gas fees for the NFTs, costing users thousands of dollars to mint an NFT that came at a cost of 305 ApeCoin (CRYPTO: APE), or less than $6,000. Many suffered failed transactions, meaning they paid a gas fee and did not get their NFT.
“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,” Yuga Labs tweeted.
Many on Twitter pointed out that over $150 million in Ethereum was burned for the mint, which led to the popular cryptocurrency trending on Twitter during portions of Saturday night.
Yuga Labs shared in a Twitter thread that they may have more plans for ApeCoin in the future.
“We’re sorry for turning off the lights on Ethereum for a while. It seems abundantly clear that ApeCoin will need to migrate its own chain in order to properly scale. We’d like to encourage the DAO to start thinking in this direction.”
ApeCoin fell sharply in price Saturday after the mint. The coin hit a low of $16.71 and was trading at $17.26 at the time of writing, down over 33% in the last 24 hours. The coin had risen significantly during the week when it was announced that it would be the primary payment option for the mint.
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Vitalik Buterin Shares Thoughts: The thread from Yuga Labs caught the attention of Vitalik Buterin, the co-founder of Ethereum.
“Don’t think optimizing the contract would help. Regardless of contract details, tx fee goes up until list price + tx fee = market price,” Buterin tweeted.
Buterin said the gas price would have gone up higher if usage per purchase decreased.
“The only solution is to understand and appreciate economics.”
The Ethereum co-founder shared an article he wrote in August 2021 that highlighted some economics on Ethereum titled “Alternatives to selling at below-market clearing prices for achieving fairness.”
In the article, Buterin writes that a fixed supply of an item in high demand leads to quick sellouts, something that has impacted concerts, restaurants and now transitioned to token sales and NFTs.
“Basic economic theory suggests that it’s best if sellers sell at the market-clearing price. If the seller doesn’t know what the market-clearing price is, the seller should sell through an auction, and let the market determine the price,” Buterin wrote.
Buterin said selling below market price, hurts the seller with missed revenue and also hurts buyers who have a missed opportunity to get the item.
The thread from Buterin was met with mixed results from the NFT community.
The post from Buterin also comes days after Yuga Labs said they were no longer doing a Dutch auction for the Otherside mint, instead opting to do a fixed price sale.
There could be many lessons learned from Saturday’s mint and high demand projects will likely take a look at what Buterin said to see if there is wisdom to be gained from his economics article related to NFTs.
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