Yuga Labs, the multi-billion dollar company in charge of dominant crypto brands like the Bored Ape Yacht Club and CryptoPunks, found itself in hot water this week after implementing—and then reversing—remedies to fan dissatisfaction with a new NFT mint tied to its Ape-themed metaverse, Otherside.

The saga began on Tuesday, when Yuga announced that players who had successfully completed a mission in the Otherside platform’s Legends of the Mara game could now claim on-chain collectibles, dubbed “Loot,” as rewards. 

Players quickly jumped to mint the NFTs on the Ethereum blockchain, only to discover that the gas fees incurred by those transactions were quite costly—especially considering that the “Loot” was supposed to be a free perk. 

This wasn’t Yuga’s first rodeo with outsized gas fees. In 2022, a frenzied mint of deeds to virtual land plots in Otherside cost users an eye-watering $157 million in transaction costs, spurring widespread frustration with Yuga’s handling of the situation.

Likely informed by such events, Yuga’s leadership attempted to rectify any bad feelings about this week’s “Loot” minting with a peace offering. On Thursday, Yuga’s Chief Gaming Officer, Spencer Tucker, posted on Twitter that community anger at the Loot gas fees was justified. To compensate for the situation, he said, any impacted user would be eligible to claim a free “Catalyst,” another in-game, on-chain perk.

The community response was likely not what Yuga was hoping for. Otherside players pilloried the concession, arguing it did not address structural issues with how Otherside expects users to mint costly NFTs on Ethereum. 

Within hours, Greg Solano, Yuga’s co-founder, stepped in to announce that the free Catalyst giveaway had been abandoned after community pushback. Instead, all gas fees racked up by Otherside players trying to mint Loot would be fully covered and reimbursed by Yuga. 

“Thanks for calling us on our shit and bearing with us,” Solano wrote. 

But to many Otherside players, this second solution, too, failed to address overarching issues with Yuga’s dependence on the costly Ethereum mainnet for on-chain transactions. 

“These two decisions back-to-back raise bigger concerns about the state of Otherside as a whole, the Agora marketplace and who’s approving these decisions,” YouTuber JRNY Crypto wrote on Twitter in response. “These decisions are entry-level mistakes, not mistakes we should see from the biggest company in the space developing a metaverse.”

Otherside has so far not committed publicly to moving its on-chain commerce to a more cost-effective Ethereum layer-2 network, or any other alternative blockchain. Yuga Labs declined to comment to Decrypt beyond pointing to Solano’s tweet statement.

ApeCoin DAO, an independent decentralized autonomous organization that manages ApeCoin, a cryptocurrency for the Bored Ape ecosystem, has long advocated for the creation of its own blockchain, dubbed ApeChain. The DAO is currently weighing proposals from several layer-2 networks including Optimism, Arbitrum, and Polygon to assist in building ApeChain. 

While Yuga Labs has indicated previously that ApeCoin DAO should explore creating its own blockchain to address Ethereum traffic and cost issues, the company has never committed publicly to using such a network—if it is ever built—to power Otherside.

But time may be running out. Even Yuga’s own leadership publicly conceded this week that continued dependence on the Ethereum mainnet may not be sustainable. 

“Minting Loot on a layer-1 makes the item-to-gas ratio bad,” Yuga’s Chief Gaming Officer Spencer Tucker wrote on Twitter Thursday.

Edited by Andrew Hayward

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