NFT

Not-So-Boring Ape Yacht Club: NFTs, Metaverse Land, and a Haywire Blockchain



Virtual Land Craze

The Bored Ape Yacht Club is a collection of NFTs or non fungible tokens that have been growing in popularity recently. Represented by images of cartoon apes, the company behind the NFTs is Yuga Labs. Yuga Labs sold virtual land deed NFTs this past weekend, which connect to its highly-anticipated metaverse project called Otherside.

Demand was so strong that Yuga Labs raised close to $320 million dollars selling these “Otherdeeds,” which are backed by Ether (ETH), a cryptocurrency sold along the Ethereum blockchain. After the digital plots went up for sale, the Ethereum blockchain became so congested it was more or less unusable. A record amount of the Ether crypto was destroyed, and people wasted thousands of dollars on failed transactions.

Gas Fees

Transactions costs, sometimes called “gas fees” with these types of sales, were a big culprit behind the chaos. As NFTs are minted, token creators or traders are charged a fee, which goes higher as activity increases. This affects apps that are based on Ethereum and slows down activity on the blockchain.

Yuga Labs originally planned to use a “Dutch Auction” method, in which the price of the NFT would fall as the network becomes more congested, to offset the rise in transaction fees. The company instead tried to put a cap on how many NFTs could be purchased per digital wallet, but that failed to control the crippling surge in user activity.

Possible Adjustments

After the gas fees had cooled down and the sale of the NFTs were settled, Yuga Labs went on Twitter and apologized for “turning off the light on Ethereum.” The company also hinted it may establish an ApeCoin (APE) blockchain, which highlights the surging demand behind these digital products. ApeCoin is not a part of Yuga Labs, but is associated with the Bored Ape Yacht Club.

Meanwhile, the strong demand for virtual land inside the metaverse is quite different from what’s been going on with cryptocurrency lately, as benchmark Bitcoin (BTC) is down 18% since the start of 2022. Proponents of the metaverse suggest it will eventually be a place where people interact, work, play, and buy products. Clearly, the land rush is already underway.

Things are changing daily within the financial world. Sign up for the SoFi Daily Newsletter to get the latest news updates in your inbox every weekday.

Sign up


Please understand that this information provided is general in nature and shouldn’t be construed as a recommendation or solicitation of any products offered by SoFi’s affiliates and subsidiaries. In addition, this information is by no means meant to provide investment or financial advice, nor is it intended to serve as the basis for any investment decision or recommendation to buy or sell any asset. Keep in mind that investing involves risk, and past performance of an asset never guarantees future results or returns. It’s important for investors to consider their specific financial needs, goals, and risk profile before making an investment decision.
The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. These links are provided for informational purposes and should not be viewed as an endorsement. No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this content.
Communication of SoFi Wealth LLC an SEC Registered Investment Adviser
SoFi isn’t recommending and is not affiliated with the brands or companies displayed. Brands displayed neither endorse or sponsor this article. Third party trademarks and service marks referenced are property of their respective owners.
SOSS22050302


All your finances.
All in one app.

SoFi QR code, Download now, scan this with your phone’s camera

All your finances.
All in one app.

App Store rating

SoFi iOS App, Download on the App Store SoFi Android App, Get it on Google Play

James Flippin ABOUT James Flippin James Flippin is the son of a financial advisor who grew up hearing and learning about bond yields, interest rates, the stock market, and the ins and outs of Wall Street. After stints as a licensing and business broker for Marcus and Millichap in New York City, James moved into broadcasting and became a reporter and anchor. He covered crime, politics, finance, and tech at NBC News Radio while working part-time as a producer for SiriusXM. James graduated from the University of Delaware with a bachelor’s degree in political science and economics. He's also an accomplished podcaster with over 10-years of experience.


TLS 1.2 Encrypted
Equal Housing Lender