Ethereum users lose over $490,000 in an attempt to mint COVIDPunks NFTs
The minting of COVIDPunks, a new NFT that throws medical masks on top of CryptoPunks avatar started on Thursday with 10,000 NFTs selling out in less than an hour. The COVIDPunks launch coincided with London, Ethereum’s latest upgrade which introduced a new protocol that allows for the burning of Ethereum tokens.
Unfortunately, Ethereum users have lost a little over 174 ETH worth around $490,000 while trying to mint the new NFTs.
It was also reported that the COVIDPunks led to the destruction of 525 ETH worth about $1.5 million, said to be the biggest ETH burner. In less than an hour, Ethereum saw its supply dropped due to the token burn this produced.
Reports also estimate that as the emission rate of Ethereum reduced by -4.7 ETH per minute, the NFT drop forced the burn-up rate to climb as high as 14 ETH ($40,000) per minute. At this point, the Ethereum transaction fee surged from 70 Gwei ($5.8) to 400 Gwei ($33) as the network got clogged.
The congestion of the Ethereum network made transactions difficult, making transactions made to mint COVIDPunks fail with no possibility of gas refund on Ethereum. The estimated losses due to the failed transactions as calculated by a special tool on a crypto metrics platform Dune Analytics was 174.39 Ethereum which is worth around $489,868.
Why Ethereum users lost their funds
Ethereum users who also attempted to mint Stoner Cats NFTs launched just days ago lost 344.4 ETH worth $790,000 in failed transactions. In addition, the sales of Stoner Cats largely contributed to the rise in Ethereum gas fees. This skyrocketed the commission network to between $9.5 and $33.
The influx of users affected the Ethereum network, forcing the price mechanism on the minting contract to provide inaccurate gas fee estimates. This raises questions on the limitations of the Ethereum protocol as well as the responsibilities creators have to their audience. Developers have also shifted the blame on Metatask, a component of the Ethereum stack. At the time, it was reported that the NFT launch was delayed due to technical challenges.
It is explained that the majority of users who were affected attempted to mint 20 NFTs, which is the maximum allowed, without any attempt to adjust the gas limit in Metatask. This was explained by Decentralized Finance developer 0xWave:
In this case, the gas limit wasn’t set high enough to cover all steps in the transaction, so the transaction failed. However it’s not failing until it runs out, so ~100% of allocated gas is being used even without the transaction succeeding.
The inbuilt limitation of Ethereum was also said to be a reason, as limited throughput and spiking gas fee has become a major problem despite its vision of allowing anyone to deploy unrestricted codes.
The inbuilt limitation of Ethereum was also said to be a reason, as limited throughput and spiking gas fee has become a major problem despite its vision of allowing anyone to deploy unstoppable code.
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