ApeCoin token collapsed by 30% after the Otherside metaverse launch
A large volume of transactions resulting from the sale of Otherdeeds NFTs led to an increase in fees
02.05.2022 - 13:30
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What’s new? On May 1, Yuga Labs, the creator of the NFT collection Bored Ape Yacht Club, launched the Otherside metaverse. A total of 55 000 Otherdeeds non-fungible tokens were sold at a fixed price of 305 APE, or $5800 at the time of purchase, generating about $320 million for the company. Such a large volume of transactions led to an increase in fees and the collapse of Etherscan (a tool that provides information about publicly available transaction data on the Ethereum blockchain network), the company representatives said on Twitter. Amid this event, the value of the APE token fell by 30% (according to Binance).
What do the representatives of Yuga Labs say? One of the Reddit users under the nickname johnfintech noted that some users spent 2,6 to 5 ETH ($6500-14000) to pay fees, more than the cost of an Otherdeed NFT itself. When all the tokens were sold out, users had paid about $123 million just for conducting transactions. Some users reported losing thousands of dollars to fees in failed transactions. The team promised to reimburse these costs and also apologized for temporarily disabling transactions in Ethereum. In addition, Yuga Labs encouraged the DAO to start thinking about migrating ApeCoin to its own sidechain for proper scaling.
What happened before? Yuga Labs rejected to hold a Dutch auction for non-fungible tokens in the Otherside metaverse. The Dutch auction involves bidding, where the bid is reduced from the maximum until an offer is received from the participants. Instead of auctioning, Otherdeed’s NFTs were put up for sale at a fixed price of 305 APE.
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