When a “Bored Ape” Awakens On The Otherside

8 mins read

In early May, Gokhshtein reported on how Otherside NFT Sales Crashed the Ethereum Network. This occurred as a result of an overwhelming response to the sale of virtual land NFTs Otherdeeds for the metaverse game Otherside by Yuga Labs, the creator behind the Bored Ape Yacht Club NFT collection.

The massive response of collectors trying to get their hands on their prized virtual land caused the Ethereum mainnet to get overloaded by transactions, sending gas prices to absurd levels just before Ethereum went dark.  This event points to major concerns around blockchain, namely decentralization, safety, and putting accessibility in the hands of the masses.

To gain some unique perspectives, Gokhshtein turned to a few seasoned experts in the blockchain ecosystem.

But first, let’s set the stage…

What Actually Happened?

 With an engaging trailer, a celebrity-packed BAYC following, an NFT craze that continues to soar, and the potential to get in on the ground floor by hopping into an ever-expanding BAYC ecosystem with a star-studded cast in their new metaverse game, it makes sense users were poised and ready to nab their plot!

So what’s so unique about the Otherside metaverse game?  Well, that’s kind of the issue on the table, at least for those who’ve already purchased land. Many details have yet to be fully revealed. 

From the partnership between Yuga Labs and NFT game publisher Animoca Brands, Otherside will bring together numerous NFT projects including the Bored Apes, Mutant Apes, CryptoPunks, Meebits, Cool Cats, World of Woman, Nouns, and CrypToadz, so it appears.

Per their website, Otherside is a strange new world…dynamic, steeped in narrative, where your actions hold consequences, and where normal rules do not apply.  Part galaxy and part archipelago, the lands have resources, artifacts, and a possible encounter with Koda primal beings. 

The site also states:

“Your Otherdeed is your key to helping build the metaverse.  Landowners are creators and can participate in demos, prototypes, test builds, in-person events, and contests that help bring the Otherside to life.”

But The Numbers Tell the Story

 In less than 24 hours, Yuga Labs amassed $561 million in Otherdeed NFT virtual land sales.  Each “deed” cost roughly $5,800 given the NFTs were minted at 305 APE each and the price at the time of minting was about $19, totaling a grand $319 million.  Secondary volume trading generated another $242 million, of which $190 million was on OpenSea.

Then the unthinkable occurred where massive amounts of traffic fueled a sudden influx of transactions creating congestion on the network. This led to an extreme spike in fees (thousands of dollars per transaction) as users fought for their position in line.  Some users ran up against failed transactions or a non-working site.

Finger Pointing

There are a lot of opinions as to who’s to blame.  Like anything, everyone plays a role, and everyone must own up to their own oversights and deficiencies, taking immediate action to mitigate further damages and offer recourse. 

The first sign of a forward-thinking company is that it steers people toward being able to see a potential problem before it happens. This involves putting measures in place to take certain actions to prevent further calamity, well before firing the starting pistol.  In other words, being well-prepared involves acting quickly when conceivable problems turn into real problems. 

In the end, some BAYC holders believe the Otherdeed smart contract lacked gas optimizations.  Others blame the Ethereum blockchain for high fees and slow transactions.

Thoughts to Consider

Need for Optimization: Smart Contracts & Blockchain Mechanics

Amy Suto, a popular freelance writer in the web3 space, claims:

"Their poorly constructed smart contracts incited insane gas fees on Ethereum, crashing the network. This seemed intentional, and in their Tweets after the fact, they highlighted the need for them to create their own L1, instead of optimizing their smart contracts or considering an L2 play on Ethereum."

Shift in Accessibility

Lyle Solomon, Principal Attorney at Oak View Law Group, consumer finance expert, and a frequent writer on blockchain and cryptocurrency shares his concerns:

"Apecoin’s Otherside Metaverse land sale and its exceptional demand has proven that Ethereum still has not scaled up enough to be cheap and be usable by the masses.

To even enter the Yuga Labs sale and purchase land, you had to have 305 ApeCoin, which cost thousands of dollars, and then a user would also have to pay the high gas fees on the Ethereum network.  Users had to pay around $180 million in gas fees to complete the transactions, some of which were failed transactions.

Ethereum needs to figure out how it wants to scale up and reduce transaction costs sooner rather than later.  Only with a cheaper transaction cost would the everyday NFT or cryptocurrency enthusiast be able to transact on Ethereum without losing hundreds of dollars in gas fees."

Shift in Users

Jeff French, CEO of Blokpax & BAYC holder, shares this perspective on the shift:

"The Otherside metaverse NFT drop has smashed records and shown the sheer thirst that investors have for this asset class.  The wide belief in the market is that major institutional funds and well-funded private investors have finally entered the fray in earnest.

We saw the first signs of this trend two weeks ago when Silicon Valley veteran entrepreneur Kevin Rose (founder of early Web 2.0 social news aggregator Digg) launched his project called Moonbirds.  It posted record 24- and 48-hour trading numbers that would only stand until this Otherside drop.  Moonbirds are also believed to have attracted significant institutional money."

Who’s Making Out Like a Bandit?

Since the story has yet to fully unfold since the Metaverse game has yet to be released, what we know thus far are the winners of this first round.

Lyle Solomon adds:

"Per reports, Ethereum miners made a lucrative $87.66M within an hour during the Yuga Labs land sale.  Rafael Shultze-Kraft, the founder of Glassnode, said the gas fees paid to miners were an all-time high for Ethereum.  This proves that while transacting on Ethereum hurts the user, it massively benefits the miner.

Yuga Labs are the biggest beneficiaries of the sale.  The sheer volume, enthusiasm, and the fact that their current land mint brought the Ethereum blockchain to a standstill cements their place as the most prominent “hype creators” in the metaverse world.

Also, scammers have been very active since the Yuga Labs sale, and as per reporting by Vice, they have already netted $5M in stolen NFTs from BAYC holders.  The vulnerability around security in using NFTs and the ease with which scammers go about obtaining the NFTs, especially the heavily hyped ones, brings into question how safe is it to be an active member in the Yuga Labs ecosystem?"

Buying Into the Hype Can Be Risky Business

Amy Suto, a freelance writer in the web3 space, comments:

"ApeCoin's Otherside Metaverse land sale is a huge step backward for the Web3 community.  They're selling land for a metaverse game that doesn't exist yet.  Creating compelling games in this space is very challenging.  I've seen a lot of metaverse games fail because they don't have the right combination of high-quality graphics, mechanics, and storytelling to keep users' attention for long periods of time.  

BAYC is raising funds for a game that doesn't exist, without a track record of making compelling world-driven games.  Essentially, they're gambling with your money, and this speculative bubble is about to burst."

Tim Drennan, Co-Founder of MedaCityMD.io, who owns 4 plots of Otherside, adds his perspectives:

"I can't start this without at first acknowledging the massive achievement this company has accomplished and the partnerships with Animoca adding significant value.  They are an entity and with that status comes a certain level of expectations.

The artwork is amazing, the dynamic NFT system is also very cool. In the end, this was just simply another metaverse release with relatively nothing to show aside from near typical NFT fanfare." 

Drennan continues: 

"The partnership with Animoca has been in place long enough to have significant development done on a metaverse.  I was hoping we could at least *see* our plots in a 3D metaverse.  That's not saying work has not been done; they chose not to release it yet.

The lack of a whitepaper on the MASSIVE amount of content they just released with singular plots of land, Kodas, Artifacts, Resources, and supposedly things to consume and spend is a bit annoying.  We don't know what anything on a plot of land other than Koda equals money.

How our land fits in the ecosystem, what that ecosystem looks like, how we travel across it, and the monetization of assets inside of it is all unknown currently."

All signs are pointing to this is going to be something we all can be proud to be a part of.... or it could go up in flames.  Trust in Yuga, I suppose the mantra goes."

The Bottom Line

Looking back over the situation, what should we be considering?

A decentralized platform means creating opportunities for the masses, greater levels of security, and cutting the middleman out to do away with transaction fees.  But wait, are we really accomplishing these ends?  And, are things actually far worse than the gains we’d hoped for? 

Well, maybe the initial argument in favor of an improved “decentralized” system had some lofty ideals from the beginning?  What we do know is that with every good idea comes the need to evolve and improve on those ideas along with the expectation that the influential and well-funded often change the playing field.

Coming Up: Breaking Down What We Know About Otherside

There is a pitch deck including details on this metaverse, but evidently, it’s outdated.  We’ll be bringing you up-to-date details, as is shared from the Otherside.