Yuga Labs, the creators of the Bored Ape Yacht Club NFT collection, is in their bag right now. The team held a “land sale” for their new metaverse, Otherside, which generated over $285 million for the company this weekend. It was successful for Yuga, but an absolute disaster for just about everybody else.
Weeks before the company began dropping hints about their new metaverse, Yuga Labs announced that they would form a DAO (and launch an accompanying token, $APE.) The airdrop of these highly-valuable tokens made Bored Ape and Mutant Ape holders even more rich than they already were. However, it also kicked off a weeks-long speculation campaign about how the token would be used. Its first use-case? The currency-of-choice for the sale, which took place on Saturday.
305 ApeCoin would get you one of the so-called “Otherdeeds”, which aren’t actually the land in the game more than an IOU for a plot of land in the forthcoming experience. There were 55,000 Otherdeeds for sale, with a limit imposed of two per person. They sold out in under 30 minutes. However, those 30 minutes were hell on Earth for the Ethereum blockchain (and many users vying for a swath of digital real estate.)
As the auction commenced, gas fees on the Ethereum network soared to thousands of gwei. Gwei, a measurement of Ethereum, helps measure the “gas” or transaction fee of an Ethereum transaction. In the best case scenario, users paid thousands of dollars in fees on top of the ~$6,000 that they spent to acquire the land. Worst case, you had spent nearly 1 ETH on gas fees just to come out emptyhanded on the other end. The company later apologized for “turning out the lights”, indicating its desire that the newly-formed DAO start to think about ways to move their activities off of Ethereum and onto another chain. That aroused controversy in crypto circles on Twitter, Discord, Telegram, and beyond for the remainder of the weekend.
However, drama aside, the sale of the Otherdeeds underscores two massive staying trends in cryptoland: the first is the arbitrary, but staying power, of digital collectables and virtual assets. This concept is not outside convention for gamers who speculated in TF2 and CS:GO skins as teenagers, but to the layperson, the idea that something online could be worth thousands of dollars might boggle the mind. Nonetheless, the Otherdeeds follow in the path of many other blockchain-based games and projects which have done virtual land sales. Turns out that virtual real estate, like its realer compatriot, has commanded considerable value as well.
And the second factor? Well, Yuga Labs, of course. Just a year out from its formation, the company is now worth over $4 billion. That deserves underlining, circling, and bolding all its own.