Bored Ape Yacht Club’s NFTs Plugged In Ethereum’s Blockchain And It’s Not For Good

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The sale of the new project from the studio behind the very popular Bored Ape Yacht Club NFTs has managed to clog the Ethereum blockchain. It’s an alarming sign for the network on which more and more projects are built.

Yuga Labs was best known for the NFT’s impressive popularity and very high prices, the Bored Ape Yacht Club. But Yuga Labs may soon be known for something else: nearly breaking the Ethereum blockchain.

On the night of April 30 – May 1, 2022, Yuga Labs held the first sale of Otherdeeds; NFTs represent pieces of land from the group’s future metaverse called Otherside, which is preparing its release. The 55,000 NFTs offered for sale in 305 ApeCoin ($5,800), the project’s cryptocurrency, were sold out very quickly. So fast that the entire Ethereum blockchain on which the project is based has been completely congested.

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The metaverse of the Bore Ape Yacht Club is called “The Otherside”. // Source: Yuga Labs

A “dense” blockchain

How can an unreal blockchain be blocked? To explain how such a thing could happen, we must understand the mechanism that blockchains use.

All blockchains share several features: Roughly speaking, it is a decentralized ledger, that is, a ledger where all transactions performed by users are recorded. Anyone can refer to transactions, anyone can access them, and there are several solutions to ensure that no one enters false information in this ledger: proof-of-work protocol or proof-of-stake protocol, which we will discuss further in this article.

Here, the protocol question is not central, but it does have an impact on what interests us: the number of transactions per second a blockchain can process. This number varies significantly from network to network and is vital to the future of blockchains.

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The Ethereum blockchain is in shambles. // Source: Batyrkhan Shalgimbekov / Unsplash

For example, the bitcoin blockchain can only process 7 transactions per second because it takes 10 minutes to verify a block with the proof-of-work protocol. That’s an extremely low number for a network that is widely used around the world and has a growth target. Ethereum faces a similar problem: the network can only verify 15 transactions per second. Only, the Ethereum network is getting more and more saturated: more and more DAO (decentralized autonomous organizationsor decentralized autonomous organization, note) is built on its own blockchain. And since the start of 2021, NFTs have made the blockchain even more complex.

To this must be added another feature of Ethereum: gas costs (or gas charges in English). These are fees that blockchain users have to pay, some of which go to the miners who manage the network. Price gas charges It depends on the usage rate of the blockchain: at peak times, processing a transaction will be more costly than when the network is less used.

What do Yuga Labs NFTs have to do with it?

The sale of new Yuga Labs NFTs on April 30 pushed the network even further. Others were especially anticipated by fans who rushed to the 55,000 coins on the market. According to CoinTelegraph, they were all sold almost instantly for around $5,800/coin. Currently, the number of transactions recorded on the blockchain has peaked (but not broken the record).

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The Otherdeeds are Yuga Labs’ metaverse NTFs. // Source: Yuga Labs / Offshore

This gas charges At the time, these fees for transactions were particularly high: users cite gas fees of between $6,500 and $14,000 to be paid in addition to the price of their NFT. Within minutes of the sale, more than $123 million was paid out. gas charges. Mind-blowing sums that show how strong the enthusiasm for the universe created by Yuga Labs is, but above all how much the Ethereum network needs to change.

The creators of Ethereum designed the network to eventually accommodate a large community and a large number of projects. The number of transactions the blockchain has to process will only increase. And to achieve this, Ethereum must be able to process more transactions per second.

Ethereum needs to be faster

Suggestions have already been made to answer these questions. The London update for August 2021 was therefore supposed to fix the ripple issue. gas charges By adjusting the basic fees calculated according to a fixed and precise grid to avoid surprise costs. The Larva Labs story shows that the method isn’t enough. The other route put forward by Ethereum developers is the move to proof-of-stake, an event known to the community as the highly anticipated. Combining “.

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Ethereum logo. // Source: Ethereum

It’s just that there is no specific date yet for the change, which would normally take place in 2022, and the Merger has already been delayed. Vitalik Butterin, co-founder of Ethereum, estimates that once the proof-of-stake changes are made, the network will be able to accept 100,000 transactions per second – but at least 2 years after the protocol change.

While we wait for the transition to Proof of Stake and the increase in Ethereum’s capacity, others are taking advantage of it. The Solana blockchain, which also hosts NFT and DAO projects and has very low gas fees, can currently record up to 1500 transactions per second.

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