The Yuga Labs digital land auction last weekend, which produced a large number of new NFTs and momentarily clogged the Ethereum blockchain, isn’t only about generating money for the firm behind the new collection of pictures that may appear in a future digital service. Other parties are benefiting from the work as well. The “Otherdeeds” mint’s news coverage indicates large quantities. “On Sunday, OpenSea established a new one-day record for Ethereum NFT trading with $476 million,” according to Decrypt, with “most” of the money coming through Otherdeed activities.
The frenzy of activity to acquire what many believe would be extremely valuable digital land — cartoon pictures of land with minor differences, in effect — was extremely profitable for Yuga Labs, which made an estimated $320 million from the event. The mint’s total activity was so high that a vast amount of ether, the coin linked with the Ethereum blockchain, was burnt. With all of the big statistics, you may believe the NFT market is on the upswing.
After all, owing to speculators picking up its freshly available digital assets, the Bored Ape crew has managed to parlay a popular NFT set into many collections, hefty venture checks, and now a license to manufacture money. But I’m curious. We can see that the Yuga Labs universe constitutes a significant chunk of the aggregate NFT market as we understand it by looking at the top collection list on OpenSea. Is there too much centralized power in the NFT market?
Yuga Labs, the web3 firm behind the Bored Ape Yacht Club, brought down the Ethereum blockchain as a torrent of users rushed to buy NFTs, which represent virtual plots of land in the company’s next metaverse project, Otherside. In what was dubbed the “biggest NFT mint in history,” 55,000 Otherdeeds were sold for a flat price of 305 ApeCoin, or roughly $5,800 at the time of purchase (via CoinTelegraph), raising about $320 million.
Otherdeeds are issued in BAYC’s native ApeCoin, but gas costs are still paid in Ethereum. The cost of a transaction on the Ethereum blockchain is known as a gas charge. Fees often rise as the network becomes more crowded because processing a transaction becomes more difficult.
Due to the high amount of transactions at the Otherdeed mint, petrol prices skyrocketed. According to CoinTelegraph, Reddit user u/johnfintech pointed out that gas fees alone cost some buyers anywhere from 2.6 ETH ($6,500) to 5 ETH ($14,000), which is more than the cost of an Otherdeed NFT (and in some cases, more than twice the cost). Buyers spent a total of $123 million to perform their transactions on the Ethereum blockchain by the time the virtual property deeds sold out (via Bloomberg).