Ethereum’s burn rate has spiked to new all-time highs following the much-anticipated sale of digital lands from Yuga Labs’ upcoming metaverse project “Otherside.”
Yuga Labs, the makers of the Bored Ape Yacht Club (BAYC), sold 55,000 virtual land non-fungible tokens (NFTs) dubbed “Otherdeeds” on Sunday. The overwhelming demand for the tokens caused Ethereum gas rates to skyrocket so much that a handful of users paid anywhere from 2.6 Ether (ETH), or $7,400 at press time, to 5 ETH, or $14,270, just to make your transactions.
During each transaction in the network, a base commission of ETH is burned, this occurs after the implementation of the London hard fork, or EIP-1559 update, in the middle of last year.
According to data compiled by Glassnode and Data Always, about 70,000 ETH was burned on Sunday, which is more than triple the previous high of about 20,000 in mid-January.
This is approximating the rest of the day as normal burn. We could easily see the number go above 70k as other transactions need to catch up on missed blockspace. It’s just incomparable to anything we’ve seen before.
— T. | dataalways.eth (@Data_Always) May 1, 2022
This is an approximation of the rest of the day as normal burn. We could easily see the figure above 70,000, as other transactions have to recover the lost block space. It is simply incomparable to anything we have seen before.
Data from Ultrasound.Money shows that since the integration of EIP-1559 on August 5, 2021, the average burn rate has been 5.81 ETH per minute.
However, during the Otherdeed NFT sale, that number shot up to 9.83 ETH per minute for a total of 99,084.65 ETH in the last seven days. Since then, the burn rate has dropped back to about 3.9 ETH per minute.
Although other platforms and projects also helped push this figure higher, it is worth noting that Otherdeed NFTs lead the “burn ranking” of the last seven days with approximately 55,817 ETH, or 56% of all burns during that period. This figure is significantly higher than second placed OpenSea with 7,152 ETH burned.
This may be the last time Yuga Labs congests the Ethereum network
With demand for the sale temporarily overwhelming the Ethereum network and many users losing funds in gas fees for failed ETH transactions, Yuga Labs has outlined intentions to build a blockchain network and move its affiliated ApeCoin to the BAYC collection.
In a Sunday post on Twitter, Yuga Labs declared that it will reimburse the gas fees of users who received failed transactions, noting that:
“Sorry to have congested Ethereum for a while. It seems pretty clear that ApeCoin will need to migrate to its own chain in order to scale properly. We would like to encourage the DAO to start thinking in this direction.”
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