Yuga Labs Bitcoin NFT Auction Completes, Ordinals Issues Clear

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TwelveFold Auction

Yuga Labs, which handles NFTs (non-fungible tokens) such as “Bored Ape Yacht Club (BAYC)”, completed the auction of the NFT collection “TwelveFold” released on the crypto asset (virtual currency) Bitcoin (BTC) on the 7th. bottom.

The top 288 recruits won the TwelveFold through a 24-hour auction that ended around 7:00 am (Japan time) on the 7th. The highest bid was 7.1159 BTC (about 21.5 million yen) and the lowest bid was 2.25 BTC (about 6.8 million yen).

The TwelveFold auction has ended. Congratulations to the top 288 bidders – you will receive your inscription within one week. Valid bids that did not rank in the top 288 will have their bid amount returned to their receiving address within 24 hours.

— Yuga Labs (@yugalabs) March 6, 2023

“TwelveFold” is a 300-piece generative art collection based on mathematics that uses a 12×12 grid to represent data. Consisting of computer-generated 3D elements and hand-drawn areas, it differs from Yuga Labs’ current projects, which have focused on anime and illustrations.

The collection will be issued on the Ordinals Protocol, which launched on Bitcoin in January 2023. It will be an experimental product for Yuga Labs, which has developed popular NFT collections such as BAYC, Cryptpunks, and Meebits on Ethereum (ETH).

Ordinal is a protocol designed by former Bitcoin Core developer Casey Rodarmor that stores NFTs (Digital Artifacts) directly on the Bitcoin blockchain without going through sidechains, Layer 2, etc.

Specifically, by assigning a serial number to the smallest unit “satoshi” (0.00000001 BTC = 1 Satoshi), which represents 1/100 million in Bitcoin, and including video and image data in 1 satoshi, search, transfer, achieved reception.

Ordinals has just been born and does not have basic infrastructure such as statistical sites and marketplaces, but it does not adhere to the “basic principles of history preservation, self-custody, and ownership”, and the security performance of the BTC network is high. Yuga Labs evaluates that the future development potential is high even considering this.

connection:Considering the Token Issuance Protocol on Bitcoin and the Ideas Behind It｜Contributed to Bitcoin Research Institute

Challenges of the Ordinals

In the future, Yuga Labs plans to distribute TwelveFold to successful bidders within a week. On the other hand, the BTC used for unsuccessful bids in the auction will be returned to the address within 24 hours.

There have been criticisms related to security regarding the situation where Yuga Labs is entrusted with BTC for the bid. The main argument is that “major players need to set a better example” because it remains a precedent for how major projects have done it and risks being abused by fraudsters.

In response to these criticisms, Yuga Labs co-founder Greg Solano explained that he took the minimum necessary process to issue NFTs with Bitcoin, which has limited functionality. He told the overseas virtual currency media The Block as follows.

The field is incredibly nascent, and TwelveFold has positioned it as an experimental project from the start. Smart contracts, which Ethereum takes for granted, and transactions that do not require a central administrator, many things do not yet exist in Ordinals.

In this market, bids are managed using Google Spreadsheets, and over-the-counter (OTC) transactions are conducted using Discord. Many existing marketplaces use multisig escrow.

Solano also pointed out the need for new tools and marketplaces to enable trustless exchanges as a future challenge for Ordinals. He added that he hopes the release of TwelveFold will help attract more developers to Ordinals.

Coming soon: bitcoin NFT marketplace based on partially signed bitcoin transactions
Hopefully this will replace the current risky practice of trustful OTC ordinals swaps where one side has to take counterparty risk, or both sides trust a centralized escrow pic.twitter.com/G3juYl34Bk

— Oren Yomtov (@orenyomtov) February 13, 2023

Cryptocurrency developer Fireblocks is one of the companies building Ordinals’ trustless electronic marketplace. The company’s researcher Oren Yomtov has announced that an NFT marketplace based on Bitcoin trading is coming soon. “It will replace current risky practices such as escrow transactions with counterparty risk and over-the-counter (OTC) swaps,” he said.

What is Escrow

Escrow is to ensure the safety of transactions by having a third party act as an intermediary when buying and selling goods. Refers to third-party custody to prevent problems such as “the product has not been sent even though I paid”. In virtual currency, by utilizing technology such as multisig, escrow can be performed so that problems such as money runaway do not occur.

Cryptocurrency Glossary