Yuga Labs Ordinals, the leading NFT creator’s newest project, hit the market a few days ago on the 6th. Mainly known for their Ethereum-based boss NFT collections like BAYC and MAYC, Yuga Labs have made a big name for themselves in the DeFi industry. Despite that, things haven’t always been smooth for the group, including their Bitcoin Ordinals launch.
What is Yuga Labs Ordinals NFT Collection?
In 2023, Bitcoin launched a Layer 1 protocol known as “Ordinals” on its blockchain. This protocol sends packets of data in transactions with satoshis. A Satoshi is a minute fraction of one Bitcoin, with each Bitcoin containing 100 million Satoshis.
In the Ordinals process, data is inscribed onto a Satoshi, which is then sent to a recipient address via a transaction. You can inscribe various kinds of data onto a Satoshi, including images and text. The result is a Bitcoin Ordinal, which is similar to a typical Ethereum-based non-fungible token (NFT).
That’s when Yuga Labs took on a new venture, but this time on the Bitcoin blockchain. This comes as no surprise, considering how much hype Ordinals have been gaining, and how much Yuga Labs have always been after the hype.
“TwelveFold” is the name of the collection, and it consists of 300 NFT-like images. Yuga Labs’ CCO explained on Twitter how the Ordinals auction would work.
Like crypto, the collection isn't so much linear but cyclical, with four different color palettes progressing throughout: winter, spring, summer, autumn. It's a nod to being optimistic whether we're in a Crypto Winter or a Defi Summer. pic.twitter.com/ZbTRdwX69E
— schmigge figge (@mfigge) March 5, 2023
The auction began on the TwelveFold website, and the top 288 bidders received 288 images from the collection. The highest bid amounted to over 7 BTC, which equates to more than $154,000. In the end, the first TwelveFold auction made an impressive $16.5 million.
To participate in the bidding process, bidders need to send their entire bid amount in Bitcoin to a unique BTC address controlled by Yuga. Winners would pay the BTC they bid, while Yuga would manually return the BTC to unsuccessful bidders.
And that’s where The Crypto community drags Yuga Labs through the mud.
Why was the Ordinals auction slammed?
Yuga Labs’ plan drew criticism from many in the crypto community. They argued that the manual conduct of refunds for unsuccessful bids was outdated and inefficient. Some even suspecting a sort of scam in the midst.
On another note, When someone made a bid in the TwelveFold auction, they had to send the total bid amount to a specific Bitcoin address. In a typical auction, bidders will offer an amount, but the receiver takes no money unless the bid is successful. As YugaLabs owned this recipient address, the community determined it was receiving swathes of bids that may not have ended up winning.
The creator of the Ordinals protocol called the auction model a “scammer’s dream” and raised concerns about bad actors potentially putting it to misuse. Casey Rodarmor also criticized the auction, calling its conduct “degenerate bullshit.”
If I, personally, Casey Rodarmor, ever see you, Yuga labs, the entity, fuck around with degenerate bullshit like this again, I will wash… https://t.co/COARsn4X0o
— Casey Rodarmor (@rodarmor) March 6, 2023
Nevertheless, Yuga Labs later announced that they have successfully refunded all the unsuccessful bids. But the act of taking prospective winners’ funds prior to the end of the auction left a bad taste in people’s mouths.
All valid bids that did not rank in the top 288 have been returned in full to their receiving address. Bidders who won an inscription and increased their bids after the final block of the auction should empty the receiving address before inscriptions are sent.
— Yuga Labs (@yugalabs) March 7, 2023
Having been in controversial spots numerous times since their birth, YugaLabs now has a somewhat fishy reputation. The company may host further Bitcoin Ordinal auctions in the future, but whether or not they receive further backlash, time will tell.