Ordinals team criticizes Yuga Labs’ handling of bitcoin NFT auctions
The Ordinals team recently raised concerns about Yuga Labs’ handling of bitcoin NFT auctions. Yuga Labs allegedly set a negative precedent by requiring all bidding funds to be transferred to their address, violating the principle of self-custody.
Yuga Labs, the parent company of the popular non-fungible token (NFT) collection, Bored Ape Yacht Club (BAYC), recently concluded a successful 24-hour TwelveFold auction, which generated an impressive $16.5 million and awarded 288 NFTs to the highest bidders.
However, Yuga Labs is now facing criticism from some users who are unhappy with the company’s customized bidding process. These users argue that Yuga Labs is setting a negative precedent for future projects because it held bidders’ bitcoin.
The Ordinals team has expressed concerns that the act of Yuga Labs to send all bidding funds to their addresses could discourage potential buyers who prioritize self-custody of their funds.
Yuga Labs responds to criticism
Yuga Labs has responded to the ongoing criticism regarding the recently held BTC NFTs auctions. Its co-founder, Greg Solano, has said that the recent auction conducted by the company on the Bitcoin blockchain does not pose a risk of fraud.
However, he emphasized that this is only possible because Yuga Labs is a trusted entity that can be relied upon. Solano also stated that he would not recommend this approach to others.
He explained that Yuga’s choice to use the bitcoin blockchain was a deliberate attempt to increase transparency. By utilizing this blockchain technology, the company can establish a clear precedent for conducting trustless auctions on Bitcoin, given the current limitations of the technology.
The NFT collection enabled by the Ordinals protocol was designed to require bidders to have their self-custody wallet. Bidders would then need to place the total amount of their bids directly into Yuga’s wallet.
According to the company, this was done to ensure the auction was appropriately conducted, only to attract backlash.
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