Folks are pissed at Bored Ape Yacht Club
GM, we take the latest Web3 news and translate it into plain old English - so you can stay up to date, without your eyes glazing over.
In today’s edition:
Folks are pissed at Bored Ape Yacht Club
This NFT project beautifully highlights the new incentives of Web3
RESOURCE: Web 3.0 Frequently Asked Questions (17:30)
Crypto.com proves why decentralization is important
Terms used (click for translation):
NFTs, Smart Contracts, Gas Fees, Staking.
Folks are pissed at Bored Ape Yacht Club
Remember yesterday when we harped on about Bored Ape Yacht Club's (BAYC) strong community support?
How's this for irony...
Turns out the community is actually pretty pissed at them.
The reasons being, are three fold:
Their 'Otherside' metaverse land sale pushed Ethereum transaction fees (aka gas fees) through the roof.
With some users paying $3-$13K in fees alone - regardless of whether or not their transaction went through.
These high gas fees happen when users try to push their transactions through quickly by over bidding. When thousands of people 'bid up' all at once, it creates a snowball effect.
And the increased fees affect anyone trying to buy something with ETH - not just those buying land in 'Otherside'.
Yuga Labs' (owners of BAYC) response to the issue was considered to be tone deaf:
“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.”
“We're sorry for turning off the lights on Ethereum for a while.”
Which many in the community read as:
'Wow. That's crazy lol. Don't hate the player, hate the Ethereum Network.'
They had other options for the rollout that could have avoided such high fees.
Including:
A dutch auction, where the price starts high and slowly lowers after each sale (so fanatics with deep pockets get in early and pay a higher price, while the majority wait things out).
Optimizing the smart contract that managed the sale. There's not much info in the linked article about how this could have been done and we're not about to bore you with the intricacies of code optimization - but apparently it was an option and there were “nearly zero gas optimizations” made.
The broader sentiment is that, not only is this a bad look for BAYC, it doesn't do Ethereum & Web3 any favors either:
( when you have crypto evangelists questioning their beliefs, you know you've messed up)
The good news is, this isn't lost on Yuga.
They're currently going through the process of refunding anyone who paid a gas fee on a failed transaction and are looking to move Ape Coin off the Ethereum Network so this doesn't happen again.
This NFT project beautifully highlights the new incentives of Web3
We love to talk about the different iterations of the web and how they work.
Each update/iteration is almost reminiscent of an iPhone upgrade:
A smoother version of what you already had, PLUS a cool new feature (a 'CNF', if you will).
Web1's CNF = access to information like never before.
Web2's CNF = interaction (watch videos, leave comments, make transactions, that sort of thing).
Web3's CNF = a shift in incentive structure.
The linked article here is about about the 'Producer Pass' NFT project, and it beautifully highlights this new shift in incentive structure.
Each of the 75 Producer Pass NFTs grants exclusive access to special events at the 75th annual Cannes Film festival and features artwork by the Web3 artist, pplpleasr.
Plus, 100% of profits go to an accelerator program, focused on supporting aspiring female content creators.
Nice! But couldn't this same thing be done with a paper ticketing system?
Absolutely it could!
But here's where that 'shift in incentive' comes in...
Paper ticketing would get you the same access to special Cannes events, along with the warm & fuzzies you get from knowing the money is going to a good cause.
NFT ticketing does the same thing...
PLUS it gives the holder a rare (1 of 75 in this case), verified piece of art from an established digital creator, that has the potential to appreciate in value.
It's a smoother version of what we already had with paper ticketing, PLUS a cool new feature :)
Resource of the day
Web 3.0 Frequently Asked Questions
(17:30)
Crypto.com proves why decentralization is important
Crypto.com just slashed their staking (i.e. interest) reward rates and crashed their CRO token in the process (down 11%).
Staking in this context works like this:
Users 'lock up' there CRO tokens for a certain time (eg: 6 months).
The more CRO is held (and not sold), the more the price is stabilized and/or pushed up.
In return for locking up their CRO, Crypto.com pays users interest (aka 'staking rewards').
So if this was stabilizing and even pushing the CRO price up, why slash their rewards in the first place?
Well, the inflated rewards were most likely leading to a loss after all is said and done.
BUT, they would have been great in attracting new customers.
Once Crypto.com were confident they'd locked in enough users, they lowered the rewards.
Kind of like how PayPal were paying people $10 for every friend they referred, back in the 90's.
This is why the crypto community gets so hung up on the importance of decentralization.
If there isn't a central authority that can change things on a whim, the safer you can feel in your decision to invest in a network.
Your Daily Dose of Web3
Elon Musk weighs in after Warren Buffett says he wouldn’t pay $25 for every Bitcoin
Ethereum core developers put off hard fork to focus on proof-of-stake merge
Alright, that’s it for today!
Love to the family,