Ethereum Gas Fees Continue to Rise. Why

GM Readers!📪 It's BitDegree Insider, and here comes the Web3 harvest.

⭐️Today's selection:

• 💽NFT Metadata
• ⛽Fuelling Ethereum
• 🧩️Answer To Yesterday's Puzzle
• 👌Selected Meme of The Day
• 📰Bite-Sized News

NFT METADATA MADE EASY

Whether you're new to the world of NFTs, or already a master, listen up!

Even if you know too many facts about them, there's still something you may not know.

For example, the fact that different NFT projects have unique ways of handling metadata.

Let's break down the Bored Ape Yacht Club (BAYC) and its metadata setup in simple terms (our thanks go to the thread by on-chain sleuth @0xCygaar.)

By the way, the floor for BAYC NFTs recently dropped below 50 ETH for the first time since mid-December 2021.

So, Wait, first of all, what is METADATA???

Metadata is like an ID card for your NFT.

It contains important information, such as the image and attributes that make your NFT unique. Understanding how a project manages its metadata can help you feel more secure about your digital collectibles.

BAYC: No Boss, No Problem

The BAYC contract is special because it doesn't have an owner. The person who made it belongs to the Yuga team, the team behind the project. They gave up control of it to ensure no one can create new NFTs and possibly affect the value of the existing ones.

Permanent Address: Your NFT's Home on the Web

Every NFT has a web address (called a URI) where its metadata is stored. In BAYC's case, this address is permanent and can't be changed, so you could rest assured that your NFT's information is safe and secure.

IPFS: A Safe Storage for Your NFT's Info

BAYC stores its metadata on IPFS (InterPlanetary File System). It's a system that keeps files safe and unchanged. In simple terms, it's like a secure online vault for your NFT's info.

Protecting Your NFT's Data: Keep It Safe and Sound

To make sure the BAYC data stays available on IPFS, you can "pin" it there.

This is like putting a digital lock on your NFT's data, so it can't be removed.

Even if something happens to the current IPFS storage, anyone can re-upload the data, and your NFT's original web address (URI) will be restored.

To sum it up, the Bored Ape Yacht Club offers a great example of how NFT metadata can be managed securely.

With no owner, a permanent web address, and safe storage on IPFS, you can feel confident that your BAYC NFT's information is well-protected.

Though, keep in mind! Different NFT collections use different methods.

Another example is Ordinals on Bitcoin. They do not use IPFS, since all the data (characteristics of an 'NFT') are stored directly in the Bitcoin blockchain.

TL;DR: Different NFT collections use different METADATA storage mechanisms. The BAYC collection shows a great example of how to do so in a well-secured manner.

ETHEREUM GAS FEE ROLLERCOASTER

Transaction fees on some dApps have reached up to $20 and higher...

The enthusiasm surrounding meme coins has led to a tremendous surge in the value of certain tokens.Arkham reports revealed that a user with the domain name dimethyltryptamine.eth invested a mere $260 in a meme token shortly after its smart contract launched, and within a week, the user's earnings exceeded $2 million.This overnight millionaire phenomenon has enticed more individuals to purchase tokens, resulting in a massive influx of users on decentralized exchanges (DEXes) like Uniswap, which further contributes to the increasing gas fees.

But wait, there's more!Sandwich Attacks, a sneaky form of predatory trading behavior that's been adding fuel to the gas fee fire.

These crafty attacks allow dishonest traders to fill their pockets by meddling with your transaction, leaving you with tokens purchased at inflated prices.

Here's how this scheme unfolds:

1. You swap USDC for ETH on a decentralized exchange.
2. You confirm the transaction, which is then sent to the mempool (transaction queue).
3. A shady trader detects your transaction in the mempool and initiates two of their own transactions: one before and one after yours, creating a Sandwich Attack (by paying a higher gas fee than you paid)
4. The dishonest trader buys ETH before you, raising its price.
5. Your transaction is executed, and you buy ETH at a higher price, further increasing the price.
6. The trader sells ETH and profits from the price difference between their initial purchase and sale.

Profit!

All this trickery happens in a matter of seconds, as these unscrupulous traders deploy specialized Miner Extractable Value (MEV) bots and pay premium commissions to speed up their transactions, causing artificial price hikes.

Sandwich attacks exploit the transparency of transactions in the memory pool and the slippage during trading.

To illustrate the magnitude of this, last year MEV-bots generated over $307 million from Sandwich Attacks, arbitrage, and liquidations.Recently, a Sandwich-bot of a user jaredfromsubway, made over $4.3 million on meme coins, causing Ethereum gas prices to skyrocket even more.

While defending against these attacks is no easy feat, the ecosystem is evolving!Decentralized exchanges are devising solutions to make the landscape more secure and user-friendly for genuine participants.

TL;DR: Ethereum gas fees are increasing due to the popularity of meme coins, which has led to a surge in users on decentralized exchanges and an increase in predatory trading behavior, such as Sandwich Attacks.

ANSWER TO YESTERDAY'S PUZZLE

Yesterday we tested your stablecoin knowledge.

And what can be said - your knowledge level is high. And it will only continue growing. So, we could even say that the progress is stable.

The right answer was Bitcoin Cash (BCH). It's not a stablecoin!

SELECTED MEME OF THE DAY

BITE-SIZED NEWS

• Societe Generale-Forge's New Stablecoin Faces Criticizm for "Horrible" Code. Could this be a bump in the road to stability?
• Abu Dhabi Authority Asks for Feedback on Its DLT Legislative Framework. In search of wisdom!
• Texas House of Representatives Approve "Proof of Reserve" Bill. A rodeo of regulations.