Yuga Labs’ TwelveFold Auction Model Draws Criticism From Crypto Community

03/06/2023 06:54 • Blockchain Briefs • 102 views

According to the news on March 6, Yuga Labs’ TwelveFold auction model caused dissatisfaction from the encryption community. According to the auction rules, the bidder was required to send all its BTC bid amount to the only BTC address controlled by Yuga. The winning bidder only needed to pay the BTC they bid, and Yuga said that it would return the BTC to the bidder who failed. Some people pointed out that unsuccessful bids must be refunded manually, just like in the “Stone Age”.

Yuga Labs’ TwelveFold auction model caused dissatisfaction from the creators of the Ordinals protocol and the encryption community

Analysis based on this information:

Yuga Labs’ TwelveFold auction model has drawn criticism from the crypto community due to some of its rules. According to the auction rules, the bidder was required to send all its BTC bid amount to the only BTC address controlled by Yuga. This means that the bidder will have to trust Yuga Labs with its cryptocurrency holdings. The winning bidder only needed to pay the BTC they bid, and Yuga said that it would return the BTC to the bidder who failed.

Some people have pointed out that the auction model itself has a flaw as unsuccessful bids must be refunded manually. The auction model works in such a way that only the winning bid is paid, and all other unsuccessful bids are refunded. However, manual refunds are not efficient, and may take a lot of time, especially if there are a lot of unsuccessful bids. This has led some people to criticize the Yuga’s auction model as being archaic.

The encryption community is particularly vigilant about protecting their privacy and security online. Sending cryptocurrency holdings to a third party, and hoping that the third party will refund the unsuccessful bids manually, is an unnecessary risk that many are not willing to take. Allowing a single entity to control the auction process raises concerns about transparency and fairness.

Auction models that require the participants to trust a single entity are not new. However, with the rise of decentralized finance and blockchain technology, more people are looking for auction models that do not require centralization. Decentralized finance offers a peer-to-peer network, where transactions from one participant to another are recorded on the blockchain in a transparent way. Such a system allows participants to keep custody of their cryptocurrency holdings.

In conclusion, the crypto community is still divided about the TwelveFold auction model from Yuga Labs. Although the auction model is not entirely new, it is still criticized for being too centralized, which goes against the principles of decentralization in the encryption community. Yuga Labs may have to revise some of its rules to accommodate more participants, especially those who are wary of trusting third parties with their cryptocurrency holdings.

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