Note that the Bitcoin network-based NFT trend originated in early 2023. Since then, their number has surpassed the 200,000-unit mark. Here’s the corresponding chart from Glassnode.

Basically, the idea is to add data about a particular image, video or song into a satoshi – the smallest indivisible part of Bitcoin, equal to 0.00000001 BTC. This Satoshi then essentially represents the said image or other object.

Amid the popularity of NFT on the Bitcoin network, the number of transactions within this blockchain has set a high for the past year. At the end of yesterday, the figure stood at 329,000 units.

What’s wrong with TwelveFold’s NFT collection?

TwelveFold consists of 300 Bitcoin-based NFTs, with each token accompanied by a unique 12×12 pixel image that somewhat resembles blockchain data. All in all, with Ordinals growing in popularity in 2023, it was only a matter of time before Yuga Labs developers were interested in what was happening.

According to Cointelegraph’s sources, the criticism in this case was not the tokens themselves, but their auction model. In general, those wishing to bid for the possible acquisition of NFT must transfer BTC to a wallet held by Yuga Labs. After a day of bidding, the company will select the largest transactions, which will result in their senders receiving their NFTs. Everyone else will have to wait for a refund from the wallet.

Yuga Labs representatives announced the end of the auction tonight. Here's the relevant replica.

The TwelveFold auction is over. Congratulations to the authors of the 288 largest bids [12 NFTs reserved for project creators – editor’s note] – you will receive tokens during the week. Valid bets which are not included in the top 288 will be returned to the recipient’s address within 24 hours.

The coins were eventually returned though, which was also announced on Twitter.

All valid bids that were not among the top 288 were returned in full to the recipients’ addresses. Bidders who won NFT and increased their bids after the final block of the auction must clear the recipient addresses before dispatch.

In this case, clearing the address is required to ensure that the satoshis from the NFT are not mixed up with the rest of the BTC. This way it will be possible to conduct transactions directly with the token of the desired project.

The problem was highlighted by user Giancarlo on his Twitter. Here’s his rejoinder, in which he describes the existing shortcomings of what’s happening. The quote is cited by Cointelegraph.

So, the Yuga Labs auction will work as follows: everyone sends bitcoins to one wallet, and if you lose the bid, they promise to manually send you back. We’re talking probably tens of millions of dollars in crypto. We’re still in the stone age.

Here, the cryptocurrency enthusiast is unhappy with the auction mechanism. Still, sending coins to someone else's address in the hope of the integrity of the creator of the NFT collection means giving up ownership of the crypto assets. And while Yuga Labs is a popular industry player with a vested interest in maintaining its reputation, some other team could very well keep the coins for themselves.

Commenters discussing the auction also noted that Yuga Labs is setting a bad precedent for similar auctions, Decrypt reports. It could be exploited by fraudsters in the future – they will simply announce a similar process of distributing tokens from some “promising” NFT collection, but will in fact only appropriate the coins received.

Casey Rodarmore, creator of Ordinals and former Bitcoin Core developer, also left his portion of criticism on Twitter. He said he was ready to sever all ties with Yuga Labs because of this “degenerate approach” to implementing the sale of the NFT collection.

To be fair, the controversial auction scheme for Bitcoin-based NFT is a consequence of the main cryptocurrency’s limited ability to conduct such events. In the case of Etherium, for example, it is possible to place bids on leading trading platforms like OpenSea and Blur for auctions and token sales, which is not currently available in Bitcoin. Given the wave of criticism, further adoption of NFT on Bitcoin will depend on the resolution of such issues.

In the meantime, some digital asset enthusiasts will probably ignore the NFT trend on the BTC network for fear of losing money. And that, of course, will hinder the development of the industry one way or another.


We think that the mechanism of this auction is really unreliable. Yes, there is no doubt in Yuga Labs' reputation, taking into account the previous achievements of representatives of this team, but it will not last forever. Accordingly, new investors may well get hooked by crooks, who will inflate the hype around the new project solely for the sake of stealing other people's crypto-assets. And since an auction involves sending coins to someone else's address, it won't be hard to do.

But again, the problem is primarily the limited capacity of the Bitcoin blockchain. Therefore, those who are not happy with what is happening may well use other popular networks for NFT, such as Etherium or Solana. Or they can propose their own solution to the problem.