Yuga Labs faces backlash over high Ethereum fees, considers blockchain alternatives for its NFT minting.
Yuga Labs, the powerhouse behind popular crypto collectibles like Bored Ape Yacht Club and CryptoPunks, recently stumbled over another NFT minting debacle. The incident, tied to their Ape-themed metaverse project Otherside, sparked outrage among its community, highlighting ongoing frustrations with Ethereum’s high transaction fees. This latest mishap raises questions about the future of Otherside’s operations on Ethereum and whether an alternative blockchain, possibly ApeChain, might be the solution.
The controversy began when Yuga Labs announced a reward system for players of the Otherside platform’s game, Legends of the Mara. Players who completed certain missions were promised free on-chain collectibles named “Loot.” However, the excitement quickly turned to dismay as participants encountered substantial gas fees on Ethereum for what was supposed to be a complimentary reward. This issue is not new to Yuga; a similar situation in 2022 saw users paying a staggering $157 million in transaction fees for virtual land deeds in Otherside.
In an attempt to quell the dissatisfaction, Spencer Tucker, Yuga’s Chief Gaming Officer, promised free “Catalyst” perks as compensation. Nevertheless, this gesture failed to pacify the community, which criticized the company for not addressing the root problem of high minting costs on Ethereum.
Exploring Solutions Beyond Ethereum
The backlash led to a quick pivot by Yuga Labs, with co-founder Greg Solano announcing the cancellation of the Catalyst offer. Instead, Yuga committed to reimbursing all gas fees incurred during the Loot minting. While this move received some approval, it also showed deeper concerns about Yuga Labs’ reliance on Ethereum’s expensive mainnet for transactions.
Critics, including influencers like JRNY Crypto, voiced concerns over Yuga’s decision-making and the sustainability of Otherside’s business model on Ethereum. Despite these challenges, Yuga Labs has remained non-committal about transitioning Otherside to a more affordable Ethereum layer-2 network or another blockchain altogether.
Amidst this turmoil, the ApeCoin DAO, a separate entity managing the ApeCoin cryptocurrency for the Bored Ape ecosystem, has been proactive in exploring alternatives. The DAO is considering proposals from various layer-2 networks, including Optimism, Arbitrum, and Polygon, to develop ApeChain, a potential blockchain solution tailored for the Ape ecosystem. While Yuga Labs has hinted at the possibility of using a dedicated blockchain to mitigate traffic and cost issues on Ethereum, there has been no official commitment to leveraging ApeChain for Otherside.
The ongoing saga has highlighted the urgent need for a scalable and cost-effective solution for Yuga Labs’ ventures. With the company’s leadership openly acknowledging the unsustainability of relying on Ethereum’s layer-1 for minting, the crypto community is keenly watching to see if Yuga will pivot to a new blockchain solution, such as ApeChain, to ensure the longevity and success of its projects.