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.”

AccessTimeIconMar 7, 2023 at 9:01 p.m. UTC
Updated Mar 7, 2023 at 10:36 p.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global hub for everything crypto, blockchain and Web3.Register Now

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.

Disclosure

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk offers all employees above a certain salary threshold, including journalists, stock options in the Bullish group as part of their compensation.

Fran Velasquez

Fran is CoinDesk's TV writer and reporter.


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.