A brief analysis of the gas fee war and unfair competition caused by NFT Drop
Original title:NFT Drops Are Broken: Here’s How We Fix Them
Original Author: NIFTY TABLE AND TAKENS THEOREM
Compilation of the original text: Haillsman, chain catcher
Compilation of the original text: Haillsman, chain catcher
In 2021, NFT collectibles will explode into a multi-billion dollar asset class. However, the quick success comes with some "growing pains".
Most NFT Drop (usually refers to the first issuance of NFT in the form of a whitelist) uses the first-come-first-served (FCFS, first-come-first-served) mechanism, and its fixed price is far lower than the market price (supply and demand match s price). So what problems will this cause? Low prices and excess demand effectively create competitive conditions. In the early days of NFT Drop, buyers had high expectations, but only the earliest buyers had the opportunity to mint NFTs. Therefore, the rush leads to a rise in the demand for minting transactions in the next block, and a large increase in gas fees.
This article will explore how the FCFS delivery mechanism can negatively impact users and relevant case studies. In addition, we also give reference suggestions for project parties and creators to alleviate this problem.
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Adidas' NFT project Into the Metaverse
Into the Metaverse ("Entering the Metaverse") is an NFT project of adidas, Gmoney, Boring Ape Yacht Club (BAYC) and Punk Comics (PUNKS Comic). It was released in December 2021 with a total of 30,000 copies. As long as you own one of these NFTs, you can get limited edition Adidas merchandise and have the opportunity to unlock more virtual experiences in the future. This NFT Drop has a pre-sale event, but only collectors who hold NFT, one of the cooperative projects, can participate. After the pre-sale, there will be a public sale that anyone can participate in.In this case, there are two main issues plaguing NFT Drop.The first is the high gas fee
, the demand to buy Adidas NFTs executed minting transactions that vastly exceeded the number of transactions that the Ethereum network could process in a single block. As a result, the cost of processing an Ethereum transaction has skyrocketed.
The diagram above illustrates these dynamics by plotting minting transactions across blocks. A green dot indicates mint success and a red dot indicates failure.
35,000 wallets attempted 39,000 minting transactions, and 59% of minting attempts failed. The median gas cost for a successful minting transaction is 0.16 ETH. The failed minting transaction wasted 680 ETH worth of gas fees. According to the price of ETH at that time, it was estimated to be about 2.6 million US dollars.The second problem is that highly skilled operators have an unfair competitive advantage.
In principle, each wallet can mint up to two NFTs, however some participants use bots to circumvent the rules. For example, one operator once minted 330 Adidas NFTs in one transaction. This person wrote a custom smart contract and deployed many sub-contracts. All subcontracts participate in minting NFTs and sending them to a wallet address.Parallel NFTA system that could alleviate the problems plaguing Adidas' NFT offerings is created by
(https://parallel.life/) NFT Drop mechanism developed by the project. Using this system, the Into the Metaverse project will allow users to keep NFTs off-chain. As originally planned, each user can keep up to two NFTs. After making one reservation, the user must wait 5 minutes before booking another. This prevents robots from being able to snipe all of the inventory before a human with normal reflexes makes a purchase.
The retention period will last until all NFTs are reserved. Once all NFTs are reserved, users have 24 hours to pay for their reserved NFTs on-chain. This means that users don't have to rush to execute transactions in a short period of time, and there will be no "gas wars". It will also leave some time for the core team to identify and weed out the bots participating in the first phase.
The downside of this approach is that users have to trust the centralized off-chain booking system, and that the team members blacklisting bots are unbiased. How to prove that users are unique people and not robots without affecting decentralization still has a lot of room for development in web3.
Doodles
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Doodles is a collection of ten thousand unique profile picture NFTs launching in October 2021.
Doodles drop has two phases: the whitelist-only FCFS minting phase and the public FCFS minting phase. In the whitelist stage, users can mint NFT at any time, and when the basic gas fee is relatively stable, few transactions fail. Once the public sale starts and people scramble to mint the remaining Doodles, the demand for block space rises and gas fees skyrocket.
Gas fee worth 335.2 ETH was wasted due to transaction failure. According to the price of ETH at that time, it was about 1.26 million US dollars. Among them, the Etherscan entry of block 13,439,104 is a perfect snapshot of this "bloodbath", it has more than 1,000 failed Doodles transactions, and the failed transaction fee alone resulted in nearly 100 ETH.
useMultiRaffleuse
The method can improve the gas efficiency and the failure rate of Doodles Drops. MultiRaffl was co-developed by Anish and Hasu, prolific researchers from Paradigm Crypto Investments. Users purchase raffle tickets by locking funds in a smart contract. The cost of the lottery ticket is equal to the cost of the NFT, and if the lottery ticket is not won, the money for buying the NFT will be automatically returned.
If you are a developer, you can use thehereFind out how to use MultiRaffle in action.
Stoner Cats
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Stoner Cats is an animated short film featuring an all-star cast, including Mila Kunis and Ashton Kutcher. Purchasing one of the 10,420 NFTs entitles the holder to various episodes and perks, such as conceiving with the creator and behind-the-scenes content.
During the launch period, 35,000 wallets made 50,000 minting transactions. 51% of casting attempts failed. The average gas fee for a successful mint is 0.22 ETH. The failed minting transaction wasted 345 ETH worth of gas fees. According to the price of Ethereum at that time, it was about 7.94 million US dollars.
Gas fees skyrocketed as the Stoner Cats casting competition kicked off. In addition, the writing of the casting contract is inefficient, resulting in insufficient calculation of the gas limit. As a result, users who have not manually adjusted the gas limit in their wallets are more likely to experience transaction failures.
Fortunately, however, the Stoner Cats team decided to reimburse participants for their gas fees after the incident.In addition to improving the contract, one way that can help improve gas efficiency and failure rate is,Set casting options after a series of Stoner Cats-themed games and puzzles.
These challenges are inherently diverse and take place on many different platforms, making it infeasible for a robot to "treasure hunt" even if the user knew all the steps. Case in point - TempleDAO's "Join Ceremony", which involved multiple steps including Discord commands, Cryptovoxels puzzles, and questions answered on a custom website.
Using puzzles and games to set the bar for foundries would also be an interesting way to screen participants and select those most interested in the project rather than inadvertently screening those with the biggest wallets and highest skills, This is how it currently works. In the long run, this could be beneficial to the community.
TIMEPieces
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In September 2021, Time Magazine launched an NFT project called TIMEPieces. The collection includes 4,676 NFTs featuring works by more than 40 artists. Benefits for holders include unlimited access to Time magazine's official website until 2023, and more opportunities to be invited to offline events in the future.
11,000 wallets made 13,500 minting attempts, 96% of which failed. The gas fee for a successful minting transaction is 2.3 ETH. Gas fees worth 265 ETH were wasted due to transaction failures. According to the price of ETH at that time, it was about $836,000. In block 13,283,025, the failed TIMEPieces transactions accounted for approximately 90% of the entire block!
The failure rate of TIMEPieces drop is as high as 96%. The NFT sold out in as little as 2-3 minutes as highly skilled participants found the contracts ahead of time and ambushed the bots. Keith Grossman, president of Time Magazine, once pointed out the issues related to the NFT issuance in his Twitter.One way to prevent this nasty outcome is toSmart Batch Auction
If you are a developer, you can use thehereFind out how to do NFT smart batch auctions.
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Other Ways to Solve the NFT Drop Problem
In addition to the delivery mechanisms discussed above, NFT projects can also explore routing minting transactions via Flashbots RPC during delivery. This has two main benefits:
If the transaction fails, the user will not have to pay gas for it.
Bots will not see users' minting transactions in the public mempool.
