Ethereum blockchain continues to be tested for durability. The bot activity during the sale of the NFT collection by Time magazine has led to a sharp increase in transaction fees on the network.
This week, Time magazine announced the release of a new collection of non-fungible tokens (NFT). The TIMEPieces collection consisted of 4,676 NFTs representing digital artworks. The cost of each NFT was 0.1 ETH ($ 310 at the exchange rate at that time).
After the start of sales, all 4,676 NFTs were sold in a matter of minutes. At the same time, the sale of tokens overloaded the Ethereum blockchain, causing a sharp increase in fees. According to Banterlytics, shoppers were paying nearly four times more for transaction fees than for the NFTs themselves. The owner of one of the addresses paid $ 70,000 to transfer 10 NFT Time.
The launch plan was simple enough: NFTs will go on sale at a set time, and potential buyers will need to keep their finger on the pulse. Even outside the cryptocurrency industry, such a system does not work very efficiently. At the start of ticket sales for concerts or a new collection of sneakers, automated “bots” dominate, which can buy up the entire stock in seconds. The bot owners then sell these assets in the secondary market at an inflated price.
During the sale of NFT by Time magazine, a similar situation developed. According to Etherscan, 100 addresses own about 24% of the total number of NFTs sold. In this case, the situation was aggravated by the fact that in the Ethereum blockchain, you can speed up the verification of the transaction by miners if you offer a higher commission. When too many people try to use the network at the same time, users who can afford to pay high fees get approval for their transactions faster.
Interestingly, NFT owners still don’t know which piece of art they purchased. Time President Keith Grossman said the NFT-related work will be unveiled today at 6:00 pm ET. Users will need to update the NFT OpenSea Marketplace metadata to find out what they own. Grossman noted that high fees and unfair distribution of NFTs are “not an ideal situation.”
“We have learned a lot about gas in general,” he said. “There are things that cannot be controlled in this area.”
Each buyer can only receive ten tokens, although one buyer can own multiple addresses. Grossman explained that the decision to limit the number of NFTs per address was part of an effort to deter bots. Now the cheapest NFT Time on the secondary market costs about 1 ETH. Grossman said he is proud to launch the NFT collection despite the chaos.
“Next time we will correct all the mistakes we made and make the sale more efficient,” he said.
Recall that in April, Time magazine began accepting cryptocurrencies to pay for subscriptions, and in March it sold three covers in the form of NFT at an auction.
I am Derek Black, an author of World Stock Market. I have a degree in creative writing and journalism from the University of Central Florida. I have a passion for writing and informing the public. I strive to be accurate and fair in my reporting, and to provide a voice for those who may not otherwise be heard.