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Ethereum Faces 18% Supply Reduction Following Bored Apes' "Otherside" Mint

Tue, 05/03/2022 - 14:27
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Tomiwabold Olajide
Ethereum also faced its lowest deflationary day ever as ETH daily net issuance fell to -58,660
Ethereum Faces 18% Supply Reduction Following Bored Apes' "Otherside" Mint
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Per IntoTheBlock analysis, Ethereum faces an 18% supply reduction after the recent Yuga Labs ''Otherdeeds'' non-fungible token (NFT) minting that led to a disruption of its ecosystem. Amid high demand, the NFT drop led to ETH gas fees skyrocketing to unprecedented highs as hourly fees rose to over $58 million. Overall, users spent 81,750 ETH in fees a few days ago, per data supplied by IntoTheBlock. Ethereum also faced its lowest deflationary day ever as ETH daily net issuance fell to -58,660.

The event also led to an ETH burning with the daily total ETH burned skyrocketing to 71,720, thus marking all-time highs.

Ethereum miners' income also rose to all-time highs as reported by crypto journalist Colin Wu. He states, "Affected by the 'Otherside' and ENS digital domain names, on May 1, Ethereum miners' manual income soared to 95,182 ETH in a single day, reaching an all-time high, of which handling fees accounted for 85.9%. The average daily gas fee also soared to 474 Gwei."

Analyzing the impact of the drop on the Ethereum network, Lucas Outumuro, head of research at IntoTheBlock, noted that the Bored Apes Yacht club "Otherside" land sale led to more fees being processed by Ethereum in three hours than in the previous two weeks. He also noted that the amount of ETH burned due to the event, if annualized, would be equivalent to an 18% supply reduction.

On April 30, Yuga Labs, the creators of the Bored Ape Yacht Club NFT collection, opened minting for Otherdeeds NFT land. As previously reported by U.Today, the online sale raised roughly $285 million worth of cryptocurrencies.

Following the historic sale, Yuga Labs, the company behind the "Bored Ape" series of NFTs and ApeCoin, said in a follow-up Twitter update: "This has been the largest NFT mint in history by several multiples, and yet the gas used during the mint shows that demand far exceeded anyone’s wildest expectations. The scale of this mint was so large that Etherscan crashed. We're sorry for turning off the lights on Ethereum for a while."

It then stated that ApeCoin might need to migrate to its chain to scale properly, as Ethereum was unable to handle the massive buying volume.

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About the author

Tomiwabold is a cryptocurrency analyst and an experienced technical analyst. He pays close attention to cryptocurrency research, conducting comprehensive price analysis and exchanging predictions of estimated market trends. Tomiwabold earned his degree at the University of Lagos.