Bored Ape Yacht Club NFTs Clogged Ethereum Blockchain And Doesn’t Promise Any Good

The sale of the new project from the studio behind the hugely popular Bored Ape Yacht Club NFTs managed to congest the Ethereum blockchain. A worrying sign for the network, on which more and more projects are being built.

Yuga Labs was best known for the Bored Ape Yacht Club, NFT’s collection of impressive popularity and skyrocketing prices. But Yuga Labs may soon be known for something else: for nearly breaking the Ethereum blockchain.

In the night between April 30 and May 1, 2022, Yuga Labs organized the first sale of its Otherdeeds, the NFTs that represent pieces of land from its future metaverse, called Otherside, of which the group is preparing the release. The 55,000 NFT, which was on sale at 305 ApeCoin ($ 5,800), the project’s cryptocurrency, sold out very quickly. So quickly that the entire Ethereum blockchain, on which the project is based, became completely clogged.

The metaverse of Bore Ape Yacht Club is called “The Otherside”. // Source: Yuga Labs

A “congested” blockchain.

How can a blockchain, which is not real, be blocked? To explain how such a thing could happen, we need to understand the mechanism used by blockchains.

All blockchains share some characteristics: it is roughly a decentralized register, that is, a notebook in which all the operations carried out by users are recorded. Everyone can consult the operations, everyone can access them, and to make sure that no one enters false information in this notebook, there are several solutions: the proof of work protocol, or the proof of stake protocol which we will discuss in more detail in this article.

Here the question of the protocol is not central, but it affects what interests us: the number of transactions per second that a blockchain can process. This number varies greatly from network to network and is vital for the future of blockchains.

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The Ethereum blockchain has become cluttered. // Source: Batyrkhan Shalgimbekov / Unsplash

For example, the bitcoin blockchain can only process 7 transactions per second, because it takes 10 minutes to validate a block with its proof of work protocol. This is an extremely low number for a network that is widely used around the world and one that has the ambition to grow. Ethereum faces a similar problem: the network can only validate up to 15 transactions per second. Except that the Ethereum network is getting more and more saturated: more and more DAO (decentralized autonomous organizations, or decentralized autonomous organization, note) are built on its blockchain. And since the beginning of 2021, NFTs have cluttered the blockchain even more.

To this must be added another peculiarity of Ethereum: the costs of gas (or gas fees in English). These are fees that blockchain users have to pay and part of which goes to the miners who manage the network. The price of gas fees varies according to the utilization rate of the blockchain: during peak hours, an operation will cost more to execute than when the network is less used.

What do Yuga Labs’ NFTs have to do with this?

The sale of the new Yuga Labs NFT on April 30 put a further strain on the network. The Otherdeeds were particularly eagerly awaited by fans, who rushed to 55,000 tokens on the market. According to CoinTelegraph, they all sold out almost instantly for nearly $ 5,800 / coin. The number of transactions registered on the blockchain at this time has peaked (but it hasn’t broken the record).

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The Otherdeeds, Yuga Labs’ NTF metaverse. // Source: Yuga Labs / Offshore

The gas fees which then applied to the transactions were particularly high: users speak of gas fees ranging between $ 6,500 and $ 14,000, to be paid in addition to the price of your NFT. In the few minutes of the sale, over 123 million dollars were paid gas fees. Amazing sums that show how strong the enthusiasm for the universe created by Yuga Labs is, but above all how much the Ethereum network must change.

The creators of Ethereum designed the network to house a large community and numerous projects. The number of transactions the blockchain will have to process will only increase. And in order to achieve this, Ethereum must be able to process a greater number of transactions per second.

Ethereum needs to get faster

Proposals have already been made to answer these questions. The London update, in August 2021, therefore had to solve the problem of the fluctuation of the gas fees setting basic fees, calculated according to a fixed and precise grid to avoid surprise costs. The Larva Labs story shows that the method is not enough. The other path proposed by the Ethereum developers is the transition to the Proof of Stake, an event highly anticipated by the community and known as ” The merger “.

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The Ethereum logo. // Source: Ethereum

There’s just no specific date for the change yet, which normally should happen in 2022, and The Merge has already been postponed. Vitalik Butterin, one of Ethereum’s co-founders, estimates that once the proof of stake change is made, the network could accept 100,000 transactions per second, but at least 2 years after the protocol change.

While waiting for the transition to proof of stake and the increase in Ethereum’s capacity, others are taking advantage of it. Solana’s blockchain, which also hosts NFT and DAO projects and boasts very low gas rates, can already record up to 1500 transactions per second.

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