The entire NFT market has been waiting for Yuga Labs, the creators of Bored Ape Yacht Club, to launch its new project. It’s an innovative metaverse game called the Otherside, and at its foundation are 200,000 land NFTs.
100,000 of those NFTs, called Otherdeeds, dropped in the most anticipated NFT mint ever Saturday. It was absolutely chock full of surprises. It turns out that many of the rumors about the sale that seemed ridiculous were true.
Yuga Labs didn’t go the seemingly obvious route of tendering the sale in Ethereum. Instead, they chose to do it in their new token, Apecoin. (Almost every single NFT drop uses Ethereum because it is one of the most stable cryptocurrencies. It’s easy to sell a large amount of ETH without losing a significant percentage to price impact.) The price was also absurdly high: at 305 Apecoin per NFT. Many prospective minters had to buy 2-2.2 ETH in the days leading up to the sale for the 305 APE.
Roughly 17 million APE was removed from the market Saturday. The APE that Yuga Labs earned from the sale is also locked for a whole year. Yuga will probably have a lot of trouble selling the tokens when they finally unlock. They can’t dump all the tokens, or even large portions, onto the market without crashing the price. That would certainly cause a PR disaster.
The Gas Wars
Yuga has a large portion of the NFT community fuming about the crippling gas war that the sale caused. Some of the investors who have made millions of dollars with Bored Ape and related NFTs are starting to turn against them. It claimed that this sale would allow more people to enter the Bored Ape ecosystem, but that wasn’t true in the end. It was impossible for most smaller wallets to mint.
As soon as the sale began, the transaction fees on Ethereum (called gas fees) spiked from less than 100 gwei (on the high end already) to over 10,000 gwei. The gas fees to mint were no less than 2 ETH per transaction. Fees started to fall slowly, but they didn’t hit 5,000 gwei for an hour.
Most of the community thought that the fees must drop even further before the end of the sale. There were barely enough KYCed wallets with the Apecoin to mint the 55,000. No way that most of those wallets have enough ETH to pay 2 ETH plus fees right?
We were entirely wrong. The fees stayed shockingly high for more than 2 and a half hours until the mint ended.
Since the launch Saturday, the value of Otherdeeds has dropped dramatically. Before the reveal, its floor almost touched 9 ETH and now it is struggling to break 4 ETH. Part of this is due to the reveal, which shouldn’t be too surprising. It rewarded lucky investors with rare deeds and unlucky investors with floor ones. The community push-back may have been even worse for the collection. Don’t underestimate the effect of a few thousand angry Tweets from influential people in NFTs.
What’s next?
It now comes down to what Yuga Labs does with the metaverse game itself– a blend of a massively multiplayer online roleplaying game and a web3 virtual world. Yuga claims that it will be a unique experience, at a scale we have never seen before.
The Otherside website details that 10,000 players or more will be able to interact in the same place at the same time. They will be able to voice chat simultaneously with thousands of other players too. It seems likely that it will be a high-quality immersive experience, but we have to hope that it doesn’t take too long to build. Hype is born and dies quickly in NFTs. However, if anyone can succeed without bowing to the hype, it’s Yuga.
There will be a second drop of Otherdeeds sometime later this year. We do know that current Otherdeed holders will get a chance to mint one. The website says: “The second 100,000 Otherdeeds will be exclusively rewarded to Voyagers who hold Otherdeeds and contribute to the development of Otherside.” We aren’t sure exactly what a Voyager is or how much they will have to contribute to the Otherside to get a mint. Knowing Yuga, we likely won’t know for a long time.
Despite the Otherside taking up nearly all of the market’s attention for the past month, it’s not the end-all-be-all of NFTs this year. It wasn’t even the only massive mint of April. Gary Vaynerchuck’s VeeFriends Series 2 public mint launched the last week of the month as well. It wasn’t as big as the Otherside, but it brought in more than $50 million.
The VeeFriends Series 2 NFTs are evolved versions of the original VeeFriends that Vaynerchuck drew himself. The floor is almost 3 times higher than the mint price despite the unimpressive art. His influence is much greater than his drawing skills.
The Silver Lining
We thought that the staggering amount of liquidity flowing into the coffers of Yuga Labs, Gary Vaynerchuck, and Moonbirds would have a terrible effect on NFTs. It seems like we were wrong, in the short term at least. It’s even possible that it had a positive effect.
The sale proved that there is an enormous amount of liquidity ready to buy NFTs. We just need great projects like the Otherside to bring it out.
The average daily trading volume on OpenSea in March and April was dwarfed by volume 24 hours after the mint. Trading volume broke $500 million the first day and another $300 million the next day. All we need is a few more massively hyped mints and we are golden.
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Do you want to learn more about NFTs and keep up with the rapidly evolving market? Check out some of our favorite editions of The NFTimes:
- Read how easy it is to build an NFT project with moonshot potential from scratch by yourself in NFTimes Volume 16 – How To Start An NFT Project By Yourself
- Learn about what separates a successful NFT launch from a fiasco in NFTimes Volume 12 – A Tale Of Two P2Es
- Figure out the most important thing in Web3, how to keep your NFTs and cryptos safe and secure, in NFTimes Volume 13 – How To Keep Your NFTs Safe
Keep up with Henry and NFTs 24/7. Join him in AlphaMint’s dedicated NFT Discord server.
