Ethereum Stalling Progress for NFTs?
The ETH Gas War Saga of 2021
Anyone who has minted, bought, sold, or traded NFTs on the ERC-20 Chain in the last couple of months knows the pain all too well of what High Gas Fees are. The problem then becomes – How much are they willing to actually pay and at what point do they simply get priced out?
Now, when you have an emerging market, you don’t want the barrier to entry to be too high or else all of the beta testers in the world will get scared off.
So, then what happens? Projects lower their Mint Fee to compensate for the high gas fees. Now, this SOUNDS like a good idea but then we have to start thinking about Value. Do you really want to pay for an NFT that costs the same price as the Gas you need to pay just to get it? That’s like flying to Australia just to eat dinner and then fly home.
There is a point at which the Juice is no longer Worth the Squeeze.
The FREE Boat is far from FREE
Let’s say someone offered you a FREE Boat. Now, at first, this sounds like a really great deal. I mean, it’s a boat and it’s free. How could it not be a bad deal?
Well, you need to pick it up – so you are going to need a truck. If you don’t already have one, then you’ll need to rent one.
Next, you’ll need a Boat Trailer. You weren’t going to just strap it to the bed of the pickup, were you? Guess what? Trailers cost money. So you buy a trailer for your free boat.
But then you need to put this thing somewhere. You can’t exactly leave it on the street in front of your house, can you? So, you find a storage yard and pay a slip fee. Good thing you did because the guy at the boatyard reminds you that you need winterization.
Winterization!!! Yeah, you need to prepare your boat to be out of the water for a few months and prepare for cold weather. You know, drain the fluids, pull up the motor, wrap the boat in plastic wrap.
Your FREE BOAT costs you $3000. Do you have any idea how hard it is to get rid of a boat? You can’t exactly leave it out front for the trash man to collect. Congratulations – you got yourself a Free Money Pit that will cost you money just to get rid of…
The $85 Fart
And therein lies the problem. When the NFT is no longer a collectible that is fun and easy and cheap but instead a collectible that immediately has lost value due to high fees just to collect it in the first place. This creates a chain of events for collectors and then, in turn, the projects themselves. All too often we see great projects that won’t even sell out because who wants to buy a $200 NFT for $400? Nobody. It wasn’t even that long ago that someone minted a Fart and sold it for $85. Not that a fart is a great example of innovation but that fart would have cost $285 just to mint today and therefore, there would likely be No Fart.
Stifling innovation is a recipe for death and failure.
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