Ethereum burning spikes to new high on Yuga Labs’ NFT hype
The burning rate of Ethereum (ETH) has spiked to new all-time high (ATH) levels following the heavily anticipated sale of tokenized land plots in Yuga Labs’ upcoming Metaverse project the “Otherside.”
Yuga Labs, the creators of the Bored Ape Yacht Club (BAYC) sold 55,000 virtual land NFTs dubbed “Otherdeeds” on May 1. The overwhelming demand for the tokens saw Ethereum gas fees shoot up so high that a handful of users paid as high as 2.6 ETH ($7,400) to 5 ETH ($14,270) just to get their transactions through.
A base fee of ETH is burned during each transaction on the network following the implementation of the London hard fork or EIP 1559 upgrade last year.
According to data compiled from Glassnode and Data Always, nearly 70,000 ETH was burned on May 1, which is more than triple the previous ATH of around 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
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, amid the Otherdeed NFT sale, that figure jumped to 9.83 ETH per minute for a total of 99,084.65 ETH over the past seven days. Since then the burn rate has dropped back down to around 3.9 ETH per minute.
Related: Ethereum gas fees drop to lowest levels since August 2021
While other platforms and projects accounted for this figure, it’s notable that Otherdeed NFTs top the “burn leaderboard” over the past seven days at roughly 55,817 ETH or 56% of all burns during that period. This figure is significantly ahead of second-placed OpenSea at 7,152 ETH.
This may be the last time Yuga Labs clogs Ethereum
With the demand for the sale temporarily overwhelming the Ethereum network, and many users losing funds on gas fees for failed ETH transactions, Yuga Labs has outlined intentions to build a blockchain and port its BAYC affiliated ApeCoin over.
In a Twitter post yesterday, Yuga Labs stated that it will be refunding user’s gas fees, and noted that:
“We’re sorry for turning off the lights on Ethereum for a while. It seems abundantly clear that ApeCoin will need to migrate to its own chain in order to properly scale. We’d like to encourage the DAO to start thinking in this direction.”