Featured Image Credit: Warner Bros. / Yuga Labs / Opensea
Topics: Cryptocurrency
The NFT market has been crashing lately, and when you see fumbles like this one made by supposedly ‘gold standard’ NFT producers, it’s easy to see why.
Even those who know very little about NFTs, have still probably heard of the Bored Ape Yacht Club, a collection of popular NFTs produced by Yuga Labs. In April, Yuga Labs announced that it would be developing its own version of the metaverse, Otherside, and real estate for the game would be sold as NFTs in the Otherdeed collection. This isn’t a new idea. Legendary game developer Peter Molyneux made around ₤40 million selling property for his unreleased title, Legacy.
Take a look at the disastrous Otherside project in the video below.
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According to a report by TechSpot, the ongoing sale which began on 2 May has been a disaster for both Yuga Labs and would-be customers. Apparently the code, which automatically mints an NFT onto the Ethereum blockchain upon sale, was poorly written. This caused several problems which led to millions being lost.
As the code couldn’t cope with the traffic to the blockchain, there was an increase in “gas prices” and a number of failed sales. Gas prices are the price it costs to mint an NFT which is passed on to the customer. As the code was unoptimised, this cost was much higher than normal, up to ₤11,000. Reportedly, over ₤130 million was charged in gas prices in this sale.
Due to the traffic many sales failed to be minted, however, these customers were still charged extortionate gas prices. Scammers immediately took advantage of the situation and began claiming things like they would refund those who were charged in error, if customers linked their wallets. This led to millions more in cryptocurrency and NFTs being stolen.
Yuga Labs has claimed it has now refunded everyone who was charged gas prices but never received an NFT. However, customers were not happy as they fear they have missed out on their chance to purchase virtual real estate. As for those who were caught out by scammers in the incident, it appears there is no way for them to get back their cash.