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  • This Week in Web3—Opensea Discord hacked, Elon sends NFT community into a frenzy again, The "Otherside" of gas wars and more!

This Week in Web3—Opensea Discord hacked, Elon sends NFT community into a frenzy again, The "Otherside" of gas wars and more!

GM!

Welcome to your one-stop for everything web3. Here we bring to you everything noteworthy about the web3 world every Sunday. Let's see what we have curated and created in this issue.

In today’s issue, we cover:

  • Opensea discord hacked with limited impact

  • Web3 Weekly Wrap

  • Learn with Kable Recap

  • Did Yuga Labs intentionally disrupt Ethereum to move to the "Otherside"?

  • Interesting reads from this week

This week in crypto 📈

Weekly web3 wrap 🗞

Opensea’s discord was compromised this Friday when members noticed a fake YouTube partnership announcement that included a link to a phishing site. Opensea's investigation indicated the attack had a "limited impact", with fewer than 10 impacted wallets and stolen items amounting to less than 10 ETH. Well, it might be limited, but not little. 👀

A Simple Phishing Attack?

Kate Kurbanova, Co-founder and COO of the risk management platform Apostro, shared her insight on the OpenSea Discord hack:

  • It is a simple phishing attack, where one of the admins probably got hacked.

  • Admin could have added a malicious bot by mistake, or even the bot itself was exploited.

  • The malicious bot got admin rights to post in the announcement channel and posted links to the phishing website.

She also shared best practices to prevent this pretty common vector of attack:

  • Securing admin accounts with 2FA (two-factor authentication) and similar practices.

  • Monitoring all managing bots and rights once every couple of weeks.

This is not the first time OpenSea has been a hacking victim. In February, OpenSea said it was investigating a scam targeting users of its NFT platform. The hacker(s) stole several NFTs and had already sold a few for Ethereum worth $1.7 million, according to CEO Devin Finzer.

Discord has also been in deep waters lately because of hacks and the services being down. Is it time for a fully functioning web3 alternative of Discord to go mainstream, or would you also prefer Elon to buy discord like Twitter user @LowKeY6x? We hope it's not the latter. 👀

More Web3 news you should know about 👇

Continuing talking about Elon Musk, he is at having a dig at non-fungible tokens again. His tweet left all of the Twitter NFT community confused and angry this time.

Not only this, but he also changed his avatar to a collage of Bored Ape NFTs, to which Michael Bouhanna, the creator of the image, replied that he should either credit him or remove the avatar. And since it’s Elon Musk we’re talking about here, his tweets have consequences—In under an hour, APE surged from $14.59 to $17.49 — up 20%. He did take the avatar down and replace it with a rocket.

Elon surely knows best when it comes to not letting anyone know his next move. 🤫

The Vatican’s officials have planned to convert the country’s beautiful artworks into NFTs, bringing their history, art, tradition and culture into the digital world. Father Phillip Larrey, the Chairman of the Vatican NFT Gallery, said that he and his team are excited and can’t wait to collaborate with the Sensorium to explore new avenues to showcase the wonders of the Vatican. Watch out for Holy NFTs ✨

Digital artist Emily Yang (Pplpleasr) has collaborated with Brut Media to release a limited-edition NFT collection. NFTs holders will get to attend an in-person event at the Cannes Film Festival on May 17-28. The 75 NFTs feature an animated loop of a white fox walking down a red carpet, divided into 3 tiers: Bronze (5 ETH), Silver(6 ETH), or Gold(7 ETH). Each NFT has different perks like access to only the festival's first day and attending the opening ceremony. All proceeds will go to the Annenberg Accelerator Program.

Learn with Kabl3👩‍🏫

We love creating content here at Kabl3, and there's no better web3 alternative to a publishing platform than Mirror! Don't be stuck on websites that own YOUR content. Take a look at THE Mirror 👀

We also shared our thoughts on DeSo this week, boiling down our thought piece from the last newsletter. 👇

Did Yuga Labs intentionally disrupt Ethereum to move to the "Otherside"?

If you think about the hottest names in the NFT space right now, Yuga Labs and BAYC must be on the list; they ARE the list. And it was fair for any of their projects to attract people, and that’s exactly what happened on the Otherside land sale.

What happened?

On March 19, Yuga Labs (the creator of the BAYC) teased a project named “Otherside” on Twitter. And it was obvious everyone, and their dog was looking forward to it; turns out it was a teaser of their planned metaverse game and the latest extension of the Bored Ape franchise. ✨

So last Saturday, we saw possibly the largest NFT sale in Ethereum history, the Otherside “virtual land sale”. The highly anticipated NFT launch netted over $400 million in sales for Yuga Labs!

What’s the catch? It also generated ONE HUNDRED SEVENTY-FIVE MILLION US DOLLARS in Ethereum gas fees. Yes, that’s right, we’ll give you a minute to take it.

Let us walk through what happened:

  • Verified owners of the ApeCoin token entered to buy deeds for 55,000 plots of virtual land in Otherside. With one of the biggest names attached, it was obvious there would be HUGE interest in the sale. So, Ethereum-based NFTs called Otherdeeds — had pushed up the price of ApeCoin last week ahead of the sale.

  • Each plot cost a buyer around $5,800 based on ApeCoin’s price of $19 as of that Saturday, plus gas fees, which skyrocketed after the sale went live as the land grab attracted heavy demand. The cost of the transaction of each Otherdeed was about $6,000, or 2 Ether, to mint, more than the price of the deed itself.

  • Demand was so strong that activity related to the event caused ripple effects across the entire Ethereum blockchain, disrupting activity and sending transaction fees soaring.

Why does it happen?

Minting an NFT on Ethereum requires the creators or traders to pay a fee to those who order transactions on the network. Gas fees increase in response to higher network activity to pay as network cost/miners' incentive.

Users can also set a “tip” to go to the miners who process transactions. A higher tip can be used to expedite a transaction by bumping that transaction to the front of the line to be processed more quickly. Too low of a tip can lead to transactions that stall or fail entirely, as happened frequently throughout the night of the sale.

The Public Reaction

Twitter was quickly flooded with reports of users spending thousands of dollars worth of gas on individual transactions. It has also turned into a debate on whether it was Ethereum or Yuga Labs at fault.

People have been blaming the Ethereum network as it became completely unusable to anyone except those who could burn thousands of dollars, and the people spending them faced issues too. But a fair share of people criticized Yuga Labs for poorly planning the drop.

Yuga Labs initially planned for the sale to be held in a Dutch Auction format in which the price of the Otherdeed NFT would go down over time to prevent Ethereum from being congested with high transaction fees. However, it later scratched the format and went with another plan to cap the number of Otherdeeds that could be purchased per wallet in each wave of the sale. The new plan failed to ease the anticipated congestion. Yuga Labs apologized on Twitter and suggested the possibility of establishing an ApeCoin blockchain.

The sudden suggestion raised some brows. Crypto Twitter quickly grew rife with speculation (without evidence) that Yuga intentionally clogged up the Ethereum network to justify a move away from the network.

Despite everything, it’s hard not to view this debacle as yet another example in a long list showing that Ethereum desperately needs to increase its transaction capacity.

The much-anticipated Merge, which will soon turn Ethereum into a proof-of-stake network, will not, at least in the short term, impact the network’s throughput.

Sharding, an Ethereum upgrade that could theoretically improve upon these aspects, was delayed in favour of expediting the switch to proof-of-stake.

The Ethereum community is currently working to scale through layer 2 rollups, such as Optimism and Arbitrum, which process transactions on separate blockchains before bundling them up and passing them back down to Ethereum.

Although Yuga has refunded gas fees to everyone who made a transaction that failed due to network conditions caused by the mint, the sale will remain in everyone's mind.

It has left us with a lot of questions, will Ethereum work on its transaction capacity soon? Are blue chip projects and the NFT game exclusive for the rich now? What about the other artists and their patrons who fell prey to the gas spike?

What's your take?

Interesting reads from this week 🤓

An article suggesting that “NFT sales are flatlining” doesn’t paint the full picture, with analysis showing that the top collections are instead defining the market.

Make smarter decisions. Messari gives you all the Bitcoin & crypto data, tools, and research you need.

That’s a wrap for This Week In Web3!

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