The largest and most anticipated NFT coin of all time occurred Saturday night with the launch of Yuga Labs’ Otherdeed for Otherside. The NFTs are linked to Otherside, a metaverse being built by Bored Ape Yacht Club’s parent company. The coin did not go as smoothly as planned and has ushered in Ethereum ETH/USD founder Vitalik Buterin.
What happened: High demand for Otherdeed led to high gas rates for the NFTs, costing users thousands of dollars to create an NFT that cost 305 ApeCoin APE/USD, or less than $6,000. Many suffered from failed trades meaning they paid a gas fee and didn’t get their NFT.
“This is the largest multi-multiple NFT coin in history, yet the gas used during the coinage shows that demand far exceeded anyone’s wildest expectations,” Yuga Labs tweeted†
Many on Twitter pointed out that more than $150 million in Ethereum was burned for the coin, triggering the popular cryptocurrency trending on Twitter during parts of Saturday night.
Yuga Labs shared in a Twitter thread that they may have more plans for ApeCoin in the future.
“We’re sorry we turned off the lights on Ethereum for a while. It seems obvious that ApeCoin will have to migrate its own chain in order to scale properly. We want to encourage the DAO to start thinking in this direction.”
ApeCoin fell sharply in price after the coin on Saturday. The coin hit as low as $16.71 and was trading at $17.26 at the time of writing, down more than 33% in the past 24 hours. The coin had seen significant gains over the week when it was announced it would be the primary payment option for the coin.
Related link: Buy Ethereum
Vitalik Buterin Shares Thoughts: The Yuga Labs thread caught the eye of Vitalik Buterin, the co-founder of Ethereum.
“Don’t think optimizing the contract would help. Regardless of the contract details, the tx fee goes up to list price + tx fee = market price,” Buterin tweeted†
Buterin said gas prices would have risen higher if consumption per purchase had fallen.
“The only solution is to understand and appreciate economics.”
The Ethereum co-founder shared an article he wrote in August 2021 highlighting some of the economics of Ethereum titled “Alternatives to Selling at Below-Market Clearing Prices to Achieve Fairness”.
In the article, Buterin writes that a steady supply of an item that is in high demand leads to rapid sales, something that has impacted concerts, restaurants and has now moved on to token sales and NFTs.
“A fundamental economic theory suggests that it is best for sellers to sell at the market clearing price. If the seller does not know what the market price is, then 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 lost revenue and also hurts buyers who have a missed opportunity to get the item.
Buterin’s thread got mixed results from the NFT community.
Buterin’s post also comes days after Yuga Labs said they were no longer doing a Dutch auction for the Otherside coin, opting instead for a fixed-price sale.
There are many lessons to be learned from Saturday’s currency and high demand projects are likely to look to what Buterin said to see if there is any wisdom to be drawn from his article on economics regarding NFTs.
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This post ApeCoin plummets after sale of other lands; Yuga Labs Wants Its Own Chain, But Vitalik Buterin Says That’s Not The Answer was original published at “https://www.benzinga.com/markets/cryptocurrency/22/05/26920692/apecoin-plummets-after-otherside-land-sale-yuga-labs-wants-its-own-chain-but-vitalik-buter”