For sports representation agency VaynerSports, Tuesday’s NFT sale of its “VSP” (VaynerSports Pass) was supposed to be a milestone. Instead, it was a fiasco.
Consumers who visited the link to mint the NFTs, which grant buyers exclusive ticket giveaways and experiences with athletes, were quickly met with a host of problems, from buffering windows to mired crypto transactions, to failed mints. The gas fees, which are transaction costs that go to the blockchain network, surged significantly, with many users illustrating on Twitter—and later, Discord—fees of 1 ETH ($3,236 at the time of writing) or higher in order to mint a single token. The cost of the actual VSP was fixed at 0.155 ETH ($504), or roughly six times less than that of merely sending the money.
In all, over $26 million was spent on gas fees alone, despite VaynerSports only netting roughly $8.2 million in sales from the collection of 15,555. Consumers took to social media to air their grievances: some had successfully minted an NFT but were mad about high costs that weren’t advertised; others explained that they, too, spent exorbitantly on gas fees, yet received no NFT at all.
“I’m disappointed, in ultimately myself, being the leader of the project, of not doing a better job of poking holes and questioning the dev [development] team,” said AJ Vaynerchuk, co-founder of VaynerSports, during a Twitter Space Tuesday night. Vaynerchuk founded the agency with his brother and NFT guru Gary, both of whom previously founded VaynerMedia. (VaynerSports is not a part of media company VaynerX, which owns VaynerMedia.) However, Gary played a “very small, non-active role in VSP,” AJ said in a Discord post. VaynerSports declined to provide additional comments to this story.
The diagnosis of the bungled VSP sale is known as a “gas war,” or a situation in which too much demand congests the blockchain network, leaving users to fight for themselves amid surging costs in order to get their transactions authorized.
In the same conversation as scams and negative environmental impact, gas wars and other gas-related barriers are an issue that brands need to be mindful of, and seek to avoid, when creating NFT projects, said Martha Bennett, VP and principal analyst at Forrester.
“To participate in a minting event, directly in this way [of VaynerSports], you really, really need to understand what you're doing,” she said. “The way in which the whole gas thing works, the prices increase the more network demand there is, so when somebody sees a failure, they might overload the network with further requests, and from that perspective, the sums involved [will be] considerable.”