Otherside’s Otherdeed sale shatters Ethereum

Hello and welcome to Protocol Fintech. This Tuesday: Otherside downsides, Robinhood vs. Munger and Wikimedia drop crypto.

out of the chain

How long will the consumer crypto gravy train last? Crypto.com is reducing its crypto-related card rewards and eliminating staking rewards. Its native CRO token thus plummeted. A marketing land grab means big donations in the name of customer acquisition: this is nothing new in crypto. What’s new is how quickly those can disappear this time around. Everything moves fast in crypto.

—Owen Thomas (E-mail | Twitter)

The downside on the other side

The highly anticipated virtual land sale from Yuga Labs sent the Ethereum network plummeting on Saturday, renewing the question of whether the smart contract network is up to the challenges posed by new businesses being built on it.

The creator of the Bored Ape Yacht Club NFT collection on Saturday sold around $320 million worth of virtual terrestrial NFTs for Otherside, his planned metaverse project. The funds, raised in the apecoin cryptocurrency that Yuga uses for Otherside, cannot be sold for a year, according to project organizers.

Around 55,000 NFTs were sold for around $5,800 each at the price of apecoin at the time. Secondary sales reached $586 million, according to CryptoSlam.

Ethereum issues are still ongoing. The network’s well-documented high transaction fees and slow execution speeds persist.

  • Massive demand has caused Ethereum gas fees to skyrocket, as transaction fees are known. Yuga, which also acquired CryptoPunks and Meebits NFT Collections, apologized for the episode and said it would refund gasoline costs to those who failed. transactions.
  • When minting Otherdeed NFTs, Ethereum fees skyrocketed, exceeding the actual costs of purchasing the underlying Otherdeed NFTs themselves. Transaction costs reached $123 million, according to Bloomberg. Yuga had decided versus doing a Dutch auction, where prices drop over time, as a technique that could lower gas costs. Instead, it limited the number of NFTs each wallet could buy in each wave of sales.
  • Simple code fixes could have lowered gas costs, according to Will Papper, co-founder of Syndicate, a DAO infrastructure startup. “Many users were upset that Yuga didn’t have a gas-optimized smart contract for typing,” said Gabe Frank, CEO of lending service NFT Arcade.

Ethereum 2.0 is coming. Will it solve this kind of hiccup?

  • Ethereum is expected to upgrade to Ethereum 2.0 later this year. It will move the network towards a proof-of-stake consensus mechanism, reducing its environmental impact.
  • But another major change, sharding, which will reduce gas fees and increase the speed of transactions, is not expected until next year.
  • Even so, many analysts expect Layer 2 networks on Ethereum to support more transactions on the Ethereum network. And other layer 1 blockchains such as Avalanche, Solana, and Cardano are trying to compete for Ethereum developers.

Why not create your own channel? yuga suggested the ApeCoin DAO, a technically separate organization that oversees apecoin, may follow Dapper Labs’ lead in building its own blockchain.

  • Dapper Labs, the crypto pioneer behind CryptoKitties and NBA Top Shot, looked at the blockchains available and said: No, we’ll build our own.
  • Yuga once helped create a token, apecoin. But apecoin is just one of many cryptocurrencies circulating on the Ethereum blockchain.
  • The ApeCoin DAO could set up its own blockchain. This makes sense, given the challenges Ethereum is facing. But this is not a simple task. Dapper spent a few years building his own blockchain, Flow, which was announced in September 2019 and started operating in October 2020. Dapper customized the blockchain for consumer applications and even created his own programming language called Cadence for smart contracts.
  • Having its own channel could be a plus as Yuga seeks to compete with other metaverse projects such as Decentraland and Sandbox, both of which use Ethereum-based tokens.

Meanwhile, what Otherside is for, besides making money for Yuga Labs, is unclear. So far, selling hot NFTs is easier than creating a metaverse that people use. Headlines around all the money that Yuga and its associated projects are raising may be ahead of player interest. While a popular metaverse can attract many people, a downside when everything is financialized is that people who want to use these services could be driven away by the high prices. “The challenge with [the] The ‘land sale’ model is that the incentives don’t always line up,” said Anand Agarawala, CEO and co-founder of Spatial, a virtual gallery metaverse service. “A lot of people buy land as an asset and try to maximize the price, while the creators who can actually develop amazing experiences there are put at a price. And you end up with a lot of empty land.

— Tomio Geron (E-mail | Twitter)


The emergence of DeFi is changing the way consumers think about how they store value. For reference, Visa recorded $2.5 billion in crypto transactions in the first quarter of 2022. We see consumers starting to really use it in a way that even a year ago was rather hypothetical.

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on the money

On protocol: The European Commission has accused Apple of breaching antitrust rules by denying competitors access to the underlying NFC technology it uses for Apple Pay, and in turn undermining tap-to-pay functions. of its potential rivals.

The Solana network was inundated with data and went down for seven hours. A large number of bots reportedly flooded the Candy Machine NFT keystroke tool, pushing validators out of consensus.

Also on Protocol: Some 23 members of Congress wrote a letter to the EPA calling for stricter regulation of bitcoin’s environmental impact. Top crypto leaders like Jack Dorsey and Michael Saylor responded, saying the letter was plagued with “misconceptions about bitcoin and digital asset mining.”

The Wikimedia Foundation no longer wants your bitcoins. After several community members called on the foundation to stop accepting crypto as a payment method last month, citing environmental concerns, the foundation decided to officially shut down its BitPay account.

A new Tesla SEC filing reveals it’s bullish on digital assets. In the electric car company’s latest SEC quarterly report, it said it was optimistic about the “long-term potential of digital assets both as an investment and as a cash alternative to cash.” liquid,” even though he ended a short-lived experiment of taking bitcoin in May 2021.


Robin Hood applauds by Charlie Munger “Annoying” review of online brokerage after ringing payment for order flow. “He should just say what he really means: unless you look, think and act like him, you can’t and shouldn’t be an investor,” Jacqueline Ortiz Ramsaya senior communications official told us.

Munger best friend warren buffet took its own swing at bitcoin. “If you told me you had all the bitcoin in the world and offered it to me for $25, I wouldn’t take it. What would I do with it?” he said at the Berkshire Hathaway shareholders’ meeting.

For a slightly kinder take on crypto, there is Citadel Securities founder Ken Griffin. At the Milken Institute Global Conference in Los Angeles, he compared cryptocurrencies to abstract art, which he collects. “Why is a painting worth 10 million dollars? » he said. “It’s oil on canvas. So the value is in the eyes of the beholder.”

Mairead McGuinnessEU Commissioner for Financial Stability, Financial Services and Capital Markets Union believes crypto needs to have global regulation in place. “We don’t need to look too far into the past to see the damage financial innovation can cause without the right regulation and supervision in place,” she writes in The Hill.

Deal flow

EBA Clearing, SWIFT and the clearinghouse are piloting an instant cross-border payments program. The test is expected to begin at the end of the year, with 24 financial institutions initially joining.

Framework Ventures has raised $400 million. Jthe VC company plans to use the funds to invest in blockchain gaming projects, as well as general Web3 and DeFi projects. This is the third crypto-focused fund from Framework Ventures.

CoinDCX raised $135 million. The crypto exchange round series D was led by Pantera Capital and Steadview Capital Management, with participation from Kingsway, Draper Dragon, Republic and Kindred.

Point raised $115 million. The equity fintech’s Series C round was led by WestCap, with participation from existing investors a16z, Ribbit Capital, Redwood Trust, Atalaya Capital Management and DAG Ventures.

Copper raised $29 million. Fiat Ventures led the Series A digital banking startup, with general partner Alex Harris joining Copper’s board. The round came hot on the heels of its $9 million seed funding in October.

NovoPayment raised $19 million. The Series A BaaS company was led by Fuel Venture Capital and IDC Ventures. Enjoy this premium shade launched by the Miami-based, Miami-based company as it plans to expand across the US and Latin America: “Today, as Silicon Valley players move to set up shop in South Florida, NovoPayment stands out as a native to the region.”

Revolut has partnered with Cross River. The UK-based super app maker has signed up with fintech-friendly Cross River Bank to start providing personal loans to US customers.


Businesses – whether web2 or web3 oriented companies that don’t want to hold crypto but want to be able to interact with crypto holders – want to be able to offer this as a payment mechanism to their communities. The other is convenience, where merchants are comfortable accepting crypto.

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Thanks for reading – see you tomorrow!

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