TL;DR: I took part in Colin and Samir’s NFT drop, and it has led me question how Ethereum the second largest crypto currency works, and its proposed future changes.

The motivation behind this post is Colin and Samir. A bit background on Colin and Samir: They started out on Youtube with a channel focusing on the Lacrosse Network about 10 years ago. Today, they focus on telling the stories behind creators, and what is happening in the creator economy. They do this through their YouTube channel, and their recently launched newsletter, Publish Projects.

Last week (May 2rd) Colin and Samir dropped their very first NFT. If you have no idea what an NFT is, you can take a look at this article. There NFT drop did not come as a surprise given NFTs recent popularity. However, I was quite happy/excited for Colin and Samir, as I have been watching their videos since they started working for Yes Theory.

What was interesting and unique about their NFT drop is anyone could participate in the NFT, even if you did not place a bid in the auction. This is done through splitting. What splitting does it allows the multiple wallet addresses to receive a portion of the total proceeds from an NFT sale.

For example, lets say I have an NFT for sale for 1 ETH, and I am equally splitting the proceeds with another wallet address. Then each wallet address would receive 0.5 ETH before any transaction fees.

Colin and Samir set up something similar for their NFT. Anyone who retweeted the tweet where they announced their NFT would recieve some portion of the sale. Heres my tweet:

Fast forward a couple days, Colin and Samir end up selling their NFT for 9.70 ETH (at today’s price (May 11, 2021), that is about $39,000!!!). They end up selling their NFT to a DAO (Decentralized Autonomous Organization, I will probably dig into this later, but probably is way too much to cover right now.)

Regarding the split, about 700 people took part in the 10% split, which translate to about ~0.001286 ETH per wallet address which is about $5.60. Honestly, when I saw that, I thinking that this was pretty awesome, given all all I had to was send out a tweet.

So fast forward to yesterday, May 10, I go an try to claim my ETH, and if I were to accept the transaction, it would end up costing me $110 in gas fees to receive my $5 ETH.

Gas fees!!!
Gas fees!!!

This is just insane!!! I would literally be losing money trying to take part in the split! Luckily, Colin and Samir have said that members of the community who took part in the split could be involved in future projects/tokens that they create. Looking forward to that!

Anyways, looking at how expensive the gas fees were for ETH, I started to come up with a lot of questions. Here are some of them:

  • How are gas fees calculated for a smart contract?
  • Why is there so much flucation in gas fees?
  • Will the proposed Proof of Stake transition between Proof of Work for ETH help reduce gas fees?
  • How does proof of stake even work? How is been tested yet?
  • Does Ethereum have a layer 2 solution, similar to how Bitcoin has the Lightning Network. Would a layer 2 solution be compatiable with smart contracts?
  • What are DAOs? whats the point of DAOs?
  • Many more?

Yeah so pretty much my frustration of such high gas fees pretty much lead me to begin to research and question Ethereum. I’m going to start taking at answering these questions in another post.