If you were trying to complete a transaction on the Ethereum network last night, you might have been surprised by the exorbitant gas fees you’ve seen.
For example, one user Sold $25 NFT Saturday night. Its total price? $3,325. That’s only $3,300 in fees.
so what happened?
The Ethereum network charges a “gas fee” for every transaction on the blockchain. This fee is used to compensate Ethereum miners for verifying transactions on the blockchain. It is a central component of how the platform operates.
Gas fees can range quite a bit as it does not depend on the size of an individual transaction, but only on the number of transactions that are being made on the Ethereum network at any one time.
If your transaction is being processed during a busy period, for example, you could find yourself paying hundreds of fees just to complete the transaction.
Users can even pay a higher amount in fees to have their transaction pushed to the front of the line to ensure it is processed.
Ethereum transactions can fail if the user does not pay enough gas fees. When this happens, not only does the transaction take place, but the user still pays the gas fee.
But last Saturday night, popular brand Bored Ape Yacht Club (BAYC) by Yuga Labs launched a new NFT project called Otherside. The project provided 100,000 “instruments” for a “virtual land” in the form of NFTs. Original Bored Ape NFTs can go for hundreds of thousands of dollars. Therefore, cryptocurrency investors have lined up to attempt to register at least one of the 100,000 NFTs in its latest series.
Result: that laden The Ethereum network that caused fees to skyrocket to astronomically large sums.
For example, I checked the fee at 10:30 PM ET on Saturday night for the .eth blockchain domain name.
You may have seen Twitter users put these domain names into their Twitter handle. It is basically a way to change the address of your crypto wallet from a string of numbers to something memorable.
Each .eth domain costs $5 to register for a year plus the associated gas fee. Sometimes this fee can be as high as $50. Other times a few hundred dollars.
Last night, gas charges laid a single .eth when you register a domain over $4,666 USD.
A cryptocurrency advocate I noticed That from just selling NFT to Bored Ape, nearly $100 million was wasted within the first hour of selling the “land” in gas fees alone.
As mentioned earlier, transactions can often fail when the Ethereum network experiences unusually high traffic. And last night many people paid thousands of gas fees for transactions that didn’t even take place.
Yoga Labs Says It will return users this fee, but it is unclear how the company plans to do so. Also, Yuga Labs will ostensibly only cover fees from failed transactions that directly involve the company. If you are a user who has been trying to make an unrelated transaction, you can say goodbye to thousands of lost fees.
Last night’s disaster is just another example of how cryptocurrencies, NFTs, and everything related to blockchain are Just not ready for mainstream.
However, there was at least one winner from the Saturday night sale: Yuga Labs. Brand Owner Bored Ape Yacht Club $285 million From the sale of NFT.
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