The sale of the new project from the studio behind the very popular Bored Ape Yacht Club NFTs has succeeded in congesting the Ethereum blockchain. A worrying sign for the network, on which more and more projects are built.
Yuga Labs was best known for the Bored Ape Yacht Club, NFT’s collection of impressive popularity and sky-high prices. But Yuga Labs may soon be known for something else: for almost breaking the Ethereum blockchain.
On the night of April 30 to May 1, 2022, Yuga Labs organized the first sale of its Otherdeeds, the NFTs representing pieces of land in its future metaverse, named other side, which the group is preparing for the release. The 55,000 NFTs, which were listed for 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.
A “congested” blockchain
How can a blockchain, which is not real, get blocked? To explain how such a thing could happen, we must understand the mechanism that blockchains use.
All blockchains share a few characteristics: it is, roughly speaking, a decentralized register, that is to say a notebook in which all the operations carried out by users are recorded. Everyone can consult the operations, everyone can access them, and to ensure that no one enters false information in this notebook, there are several solutions: the proof of work protocol, or that of proof of stake which we discuss in more detail in this article.
Here, the question of the protocol is not central, but it has an impact on what interests us: the number of transactions per second that a blockchain can process. This number varies dramatically from network to network — and it’s vital to the future of blockchains.
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 used widely around the world, and which has ambitions to grow. Ethereum faces a similar problem: the network can only validate up to 15 transactions per second. Only, the Ethereum network is more and more saturated: more and more DAO (decentralized autonomous organizations, or decentralized autonomous organization, note) are built on its blockchain. And since the start of 2021, NFTs have cluttered the blockchain even more.
To this must be added another peculiarity of Ethereum: gas costs (or gas fees in English). These are fees that users of the blockchain must pay, and part of which goes to the miners who run the network. The price of gas fees varies according to the rate of use of the blockchain: at peak times, an operation will cost more to perform than when the network is less used.
What do Yuga Labs NFTs have to do with this?
The sale of the new Yuga Labs NFTs on April 30 has further strained the network. The Otherdeeds were particularly awaited by the fans, who rushed to the 55,000 tokens on the market. According to CoinTelegraph, they all sold out almost instantly for nearly $5,800/coin. The number of transactions recorded on the blockchain at this time peaked (without breaking his record).
The gas fees which were then applied to the transactions were particularly high: users talk about gas charges between $6,500 and $14,000, to be paid in addition to the price of their NFT. During the few minutes that the sale lasted, more than 123 million dollars were paid in gas fees. Mind-blowing 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 eventually accommodate a large community and numerous projects. The number of transactions that the blockchain will have to process will only increase. And to be able 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 put forward to answer these questions. The London update, in August 2021, was thus supposed to solve the problem of the fluctuation of gas fees by setting up basic fees, calculated according to a fixed and precise grid in order to avoid surprise costs. The Larva Labs story shows that method is not enough. The other avenue put forward by Ethereum developers is the move to proof of stake, an event highly anticipated by the community and known as ” The Merge “.
Only, there is no specific date yet for the change, which should normally take place in 2022, and The Merge has already been delayed. Vitalik Butterin, one of the co-founders of Ethereum, believes that when the switch to proof of stake 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 capacity of Ethereum, others are taking advantage of it. The Solana blockchain, which also hosts NFT and DAO projects and boasts very low gas fees, can already record up to 1500 transactions per second.
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Bored Ape Yacht Club’s NFTs Clogged Ethereum’s Blockchain and It Doesn’t Bode Well
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