While the craze surrounding non-fungible tokens (NFTs) has not died down by any means, one must nevertheless admit that while NFTs have helped bring in more people to crypto and the world of decentralized finance (DeFi), there are still nevertheless many risks that individuals should be made aware of. Of course, these risks are not exclusive to NFTs. However, this article will highlight how the demand for the ‘Stoner Cats’ NFTs has now led to considerable losses thanks to weaknesses that have been showcased regarding the Ethereum (ETH) protocol.
As such, on-chain data analytics have now shown that users have suffered losses of over 300 ETH as a result of failing to successfully mint the aforementioned ‘Stoner Cats’ NFTs. At today’s prices, the loss would have been worth about $700,000.
So, what went wrong?
It was revealed that the users who suffered the losses had actually neglected to set the gas limits to be adequately high enough. What this means is that the transactions were thus left in a sort of ‘limbo’, and the miners had decided to write other transactions (which would have a higher pay) into the respective blockchain. What’s more, is that all of the allocated gas is, in fact, still being utilized despite the fact that the transactions failed.
The way things work with Ethereum is that in the event that a transaction does fail or ‘run out of gas, the users would find that the charges are still applicable. This ordeal had highlighted a similar issue that had occurred last year when the gas fees had increased to reach 710 gwei, which is ridiculously high. Naturally, users are now demanding that compensation be provided if the ETH cannot be returned.
Furthermore, the extremely high gas prices could be argued to have been the result of poor scalability, as is often the case when the total amount of transactions nears the network’s overall capacity. In situations such as these, miners tend to prioritize those transactions with the highest price, as there is increased competition regarding the transactions which have to be written for the respective block.
For those who might not know, ‘Stoner Cats’ is a show that includes voiceovers from several A-listers, which also includes Mila Kunis and Ashton Kutcher. Vitalik Buterin, the co-founder of Ethereum, was also featured. Additionally, this show is the first of its kind as it is completely funded via the sales of non-fungible tokens.
As the show’s NFTs sold out in less than an hour, it has become abundantly clear that there is indeed a demand for initiatives such as ‘Stoner Cats’, and this could only be the beginning, despite the issues faced with the gas fees and Ethereum’s network which will have to be solved soon.