Yuga Labs, the company that launched the Bored Ape Yacht Club NFTs, has raised $285 million in cryptocurrency for plots of land - the largest NFT mint in history by several multiples, but at the huge expense of many who bought in.
The year following the first release of 10,000 computer-generated cartoon apes, Yuga Labs is once again a beneficiary of the huge interest in its ape NFTs besides others.
Nevertheless, it can certainly be argued that the latest land sale, although bringing in a whopping $285, went very wrong, at least for many investors who bought in.
A couple of days before the land was minted, apecoin, the cryptocurrency that land would be bought in, was trading at around $26. Then when the mint went live it was still at a relatively healthy $22. At time of press the price is now at $15, a fairly large dump since just before the land launch.
The stacking and then selling of so much apecoin caused the ethereum gas price to surge like crazy. So why did this happen, and could it have been avoided?
For a start, Yuga Labs are having to answer uncomfortable questions around the fact that their smart contracts for the land launch were far from well optimised.
The gas burned during the Otherdeed land sale amounted to nearly 56 thousand $ETH over a seven day period, nearly 8 times what was burned by Opensea, normally the biggest gas burner on the ethereum network.
A red light went on for many as Yuga Labs appeared to be trying to find a solution for what went wrong on Twitter.
Yuga Labs took a lot of flak for this, and many who replied were furious that Yuga Labs appeared to be blaming the ethereum network rather than their own smart contracts, and also that the company was already hyping its own future layer one blockchain.
According to some devs, correctly optimised smart contracts would have saved more than 39 thousand $ETH in gas fees, and examples of the optimised code were even posted.
Pricing the land sale in $APE was also another controversial play by Yuga Labs. This obliged some investors to buy $APE at $24 plus, and then they were either not able to afford the gas fees, suffered failed transactions (but paid the gas anyway), or got severely burned by the massive gas spike.
Yuga Labs has said it will make good those who received the failed gas transactions, arguably the absolute minimum it can do in order to retrieve the situation in some way.
The future bored ape metaverse will be under some heavy scrutiny when it does eventually roll out. It has the opportunity to be a resounding success. However, after this debacle, many might well be rethinking their investment.
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