Yuga Labs Co-Founder Says First Bitcoin NFT Auction Doesn’t Open Door to Scammers
Greg Solano said the company’s use of the Bitcoin blockchain and its strategic bidding process could only be done because Yuga Labs is a “trusted party.”
Greg Solano, co-founder of Yuga Labs, doesn’t think the company’s most recent auction – its first-ever on the Bitcoin blockchain – is opening the door to scammers.
“This only works because Yuga [Labs] is a trusted party and we could be depended on in this way,” Solano told CoinDesk TV’s “First Mover” on Tuesday. “It’s not something I would recommend to others.”
On Monday, the parent company of popular non-fungible token (NFT) collection Bored Ape Yacht Club (BAYC) closed its 24-hour TwelveFold auction in which it generated $16.5 million and awarded 288 NFTs to its top bidders.
Miami-based Yuga Labs, however, is now facing pushback after users criticized the company’s tailored bidding process. Some argued that because Yuga Labs held bidders’ bitcoin, it is now setting a bad precedent for future projects.
Solano, however, said Yuga’s decision to use the Bitcoin blockchain is the company’s effort to be more transparent. By being explicit, the company could then “set the best precedent … given the constraints of running a trustless auction on Bitcoin that simply isn’t possible at this stage.”
Via the Ordinals protocol, the Bitcoin-enabled NFT collection required that its bidders have a self-custody wallet in which they would need to place the full amount of their bids directly to Yuga.
As part of the auction, bidders also needed to have an empty wallet that would receive the NFT. More than 3,200 bidders placed their bitcoin upfront. Unsuccessful bidders would “have their bid amount returned” to their wallet addresses within 24 hours, the company said in a tweet.
“It was important to Yuga that we weren’t going to be using something that was going to be obfuscating that trust, but actually putting it front and center,” he said regarding the company’s use of the Bitcoin blockchain.
The auction, which Solano said is still in an “incredibly nascent” space, creates a way for Yuga to drum up developer interest, while adding to the security budget of the Bitcoin chain and experimenting on it, he said.
“We're marketplace agnostic, except for the fact that we strongly believe in creative royalties and want to see marketplaces stand by creators,” Solano said.
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.
Learn more about Consensus 2024, CoinDesk’s longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.