The sale of virtual land in the Metaverse generated such a rush that the Ethereum ecosystem was brought to its knees. Given the congestion, the gas fee – the transaction fee – sometimes amounts to at least 2.5 ETH. This also affected uninvolved Ethereum users. Good advice is valuable now.
Dhe Bored Ape Yacht Club is one of the most famous NFT collections released by Yuga Labs. The company launched a new wave of sales last Saturday, offering Otherdeed NFTs at a fixed price of 305 ApeCoin, a self-issued currency. The NFTs represent bundles in an upcoming multiplayer game called Otherside, and were priced at just under $5,800 when the auction started.
A costly struggle for scarce resources
While the 55,000 NFTs available were themselves minted in ApeCoin, the transactions were based on the Ethereum blockchain. The huge rush, which far outstripped supply, sparked a “gas war”. Because the Ethereum blockchain makes it possible to offer miners a higher commission and thus accelerate the execution of their own transactions. In a particular auction situation, speed is of course an exceptional factor. Yuga Labs’ NFT drop, for example, has attracted massive amounts of computing power.
Other users were left behind – or had to offer higher gas charges themselves. At around US$25 recently, hardly anyone could keep up with the Otherside community. This drove the price of gas to around 2.5 ETH for a single trade, which equates to almost $7,000. But the base fees within the Ethereum ecosystem have also been increased by the high load. As a result, users who were not at all connected to the NFT hype on the other side also had to pay higher gas costs.
And also among those who own land in the Otherdeeds metaverse (website) wanted to secure, there are quite a few losers. Because the exorbitant increase in transaction fees has caused some wallets to explode. If there is not enough credit, the transaction fails. The gas charges will then still be collected. No NFTs received, but thousands of dollars gone, and still within the rules – maximum disappointment guaranteed.
After all Yuga Labs offered on Twitter, to reimburse the costs in such cases. It shouldn’t be difficult, at least financially. After all, the company generated around US$320 million from the digital properties in just under four hours. With new NFT sales from the Otherside metaverse, over $560 million would have been raised in 24 hours.
causes and solutions
Startup NFT expected gas prices to rise. An upper limit should then temporarily slow the minting of new NFTs until the situation calms down and prices come back down. At least that’s what Yuga Labs announced as the auction approached. But this mechanism obviously did not work, at least the assault was not effectively slowed down. Immediately after the auction ended, Yuga Labs tried to justify on twitter.
Another reason for the high resource consumption is believed to be in the poorly designed smart contract code of NFTs. It barely contained any optimizations with respect to processing speed. Will Papper, co-founder of SyndicateDAO, discussed the removal of the ERC721Enumerable extension. This code improvement typically reduces gas loads by about 70%. In this case, 70-80 million of the last 180 million transaction fees could be saved – which Yuga denies.
The NFT publisher itself questions the limited capacity of the Ethereum blockchain. In fact, Ethereum is considered partially congested, which has led to higher gas fees in the past, but never to this extent. While Yuga Labs survives by installing its own sidechain (“ApeChain”), Ethereum is also working on solutions.
The move to the Proof-of-Stake (PoS) concept, which will take place by the end of the year, involves moving to a more powerful consensus layer. Transaction fees would then drop by a factor of 50 to 100, the operators announced.
Second, a proposal by Ethereum co-founder Vitalik Buterin, who proposed a block call data limit last November, needs to be tested. Block-wide transaction data throttling is expected to reduce overall transaction costs on the ETH network. The proposal has been implemented as Ethereum Improvement Proposal (EIP) 4488 on the Ethereum sidechain testnet on Geth. It should start its activities at the beginning of June. hj