At the end of its auction yesterday, Yuga Labs tweeted that the non-fungible tokens (NFTs) of its latest collection, the TwelveFold inscriptions, have been sent to all empty receiving addresses of successful bidders. This “album” is nothing like what Yuga Labs has previously released. Widely successful off its NFT collections, Yuga Labs made a name for itself within the crypto industry. Its first two collections – Cryptopunks and Bored Apes Yacht Club were OG collections and still stand apart from the rest as the two NFT projects with the largest market capitalization ($1 billion+ each). They also boast an exclusive list of holders; Eminem, Jimmy Fallon, Stephen Curry, Mark Cuban, Madonna, Ben Simmons, Tom Brady, Neymar Jr, Post Malone, Paris Hilton, Kevin Hart, Von Miller, Lil Baby, Snoop Dogg, The Chainsmokers, Steve Aoki, Shaq, and many others. On the back of this rare accomplishment, they have launched several other Ethereum NFT projects, Otherside Meta, Meebits, 10KTF Shop, a coin – APE, and most recently, the TwelveFold (Ordinals) NFT collection on the Bitcoin blockchain.
What TwelveFold Is, What Ordinals Are
The TwelveFold is Yuga Labs’ first NFT project on Bitcoin. In fact, it is the first Bitcoin NFT project by any web3 behemoth. NFTs on Bitcoin? Yes, NFTs on Bitcoin. Let’s track back for a second.
Traditionally, Bitcoin is not suitable for running complex applications, so it has not really had a use case outside of being a decentralized medium to own and transfer monetary value. Bitcoin was never intended to host applications on its base layer. Satoshi Nakamoto, Bitcoin’s creator, envisioned it as a censorship-resistant, peer-to-peer method of settling payments. However, the 2021 Taproot upgrade on the chain opened it up to a broader range of transaction forms. The upgrade introduced Schnorr signatures which improved the scalability of the blockchain and, subsequently, the viability of on-chain smart contracts. Then at the beginning of the year, a new wave hit the blockchain and its native maxis. Casey Rodarmor, a software developer who actively worked on Bitcoin, launched the Ordinal Protocol, essentially NFTs on Bitcoin. Ordinals use the Taproot upgrade to store the NFT data in Taproot script-path spend scripts. Taproot relaxed the limits on data sizes in a bitcoin transaction, allowing the developer to repurpose old opcodes (OP_FALSE, OP_IF, OP_PUSH) into what he described as “envelopes” to store arbitrary data for NFTs. This revolutionary execution birthed a new use case for Bitcoin, leading to crowded mempools and consistently full blocks. Casey’s Ordinals went on to be highly successful, with one selling at 9.5 BTC, or roughly $214,000 at the time. Yuga Labs then took a leaf.
On February 28th, Yuga Labs announced on Twitter that it would unveil 300 tokenized computer-generated artworks (NFTs) on Bitcoin as part of its TwelveFold collection that will go up for auction on March 6th. The firm went on to explain the concept behind the collection;
“TwelveFold is a base 12 art system localized around a 12×12 grid, a visual allegory for the cartography of data on the Bitcoin blockchain,” the post read, adding that:
“Satoshis are the smallest individually identifiable units of a Bitcoin. An inscribed satoshi can be located by tracking when that satoshi was minted in time via the Ordinal Theory protocol.”
“Inspired by this, our collection explores the relationship between time, mathematics, and variability,” it explained. It also cited the recent buzz around Bitcoin NFTs, or Ordinals, as why it chose to drop a collection on the network.
“Stepping into the Ordinals Discord a month ago felt like getting a glimpse of the 2017-era Ethereum NFT ecosystem. It’s the type of energy and excitement we love at Yuga,” the firm stated. The auction for TwelveFold started at 11 AM GMT on the said day and ended 24 hours later, 11 AM, March 7th, and took place on the website. Interested participants were to send their entire bid amount in Bitcoin to a unique BTC address controlled by Yuga, alongside an empty Bitcoin address that will receive the NFT if their bid is successful. Winners would simply have their BTC taken, while Yuga said it would return BTC to those who were unsuccessful in placing a top bid. Successful bidders will then have their NFt sent to the empty Bitcoin address they have provided.
The Event of the Auction
The interest in TwelveFold from the NFT community was fever high, and rightfully so. Yuga Labs has an excellent track record. The auction was not just sold out, but several bidders were left red-faced as they had to leave with nothing. Two hundred eighty-eight bidders won one of the Bitcoin NFTs from the collection. Yuga said the winners would receive their inscription within one week, while the unsuccessful bids would have their bid amount returned within 24 hours. The auction yielded 735 Bitcoins for Yuga Labs worth an estimated $16.5 million at current prices. The highest of the 288 bidders paid just over 7 BTC or $161,000 for one of the pieces. This is a list of the top 10 successful bidders and…
…the bottom 10 successful bidders.
Safe to say that the auction was a hit and the project a resounding success; however, some fans were aggrieved. Yuga Labs received backlash from the crypto community, which identified flaws in how Yuga conducted the auction for the Ordinals collection.
Controversies and Irregularities
Cointelegraph’s headline at the end of the auction read, “Scammers dream’ — Yuga’s auction model for Bitcoin NFTs sees criticism.” This tagline originated from the Twitter user @veryordinally. They and many others have pointed accusing fingers at Yuga Labs, calling it out for how it conducted the auction, which they labeled “incredibly flawed.” Some NFT enthusiasts have said that despite having all the resources to create a top marketplace for the Ordinals ecosystem and thereby making the trend sustainable in the long term, Yuga Labs had chosen to extract money from their audience by capitalizing on the hype. More criticized the idea of manually conducting refunds for unsuccessful bids like it is the “stone age.” Yuga Labs is viewed as a trendsetter in the NFT industry. Thus, its “send in – fail – refund” minting model for Ordinals will likely set a precedent for the industry and thus incentivize scammers and fraudulent actors within the space.
Bitcoin Ordinals creator, Casey Rodarmor, weighed in on the discussion, telling Yuga to “get fucked” and calling the conduct of the auction “degenerate bullshit.” He added if Yuga were to conduct a similar auction, he would encourage others to boycott the project. Other users pointed out the shortcomings of the auction system, saying it is possible some could overpay for a TwelveFold due to a potentially significant price discrepancy between the highest and lowest bids in the top 288.
Despite the criticism from some, many were happy to see a large project such as Yuga — which rose to prominence due to multiple Ethereum-based NFT collections — bridge across to Bitcoin.
The Twitter user @veryordinally, who had criticized the collection, later tweeted appreciation of “the fact that Yuga took the effort to attempt [to] go a Bitcoin route when setting up this auction.”
“To give credit where credit is due – I really appreciate the fact Yuga took the effort to attempt and go a Bitcoin route when setting up this auction. Somewhat irrationally it pains me even more to see a bitcoin approach setting a bad precedent, than an ETH-based approach” An Ordinals-based collection, Ordinal Pizza OG, also expressed excitement at Yuga’s BTC collection and called it a “massive net positive for Ordinals.”
For Bitcoin and its maxis, who strongly contest the idea of NFTs on the network while constantly reminding anyone who cares to listen that the blockchain should be limited to financial transactions only as imagined by its creator, this Pandora’s Box has been opened. It will most likely not close anytime soon. NFTs are here and will stay.
Transaction fees on Bitcoin have recently ticked higher, and a quick look at the mempool shows a huge increase in pending transactions. This simply means there is more activity on the network today than in recent times. So far, Ordinals have been revolutionary, and though we are yet to see the end (suggesting it is only a passing trend), we sure want to enjoy the ride.
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