Tutorial: How to Bring Bitcoin NFTs to Ethereum via Emblem Vault?

Author: Cookie, Rhythm BlockBeats

In the article Bitcoin NFT "Breaking Ground": Ordinals Protocol, FOMO, and Controversy, the author introduced the current trading dilemma of Bitcoin NFTs—there is no trading market, relying solely on OTC. This time, Emblem Vault is introduced, which encapsulates Bitcoin NFTs and brings them to the Ethereum mainnet, allowing Bitcoin NFTs to be traded directly on OpenSea.

How to Achieve This?

Emblem Vault plays the role of a "custodian"—by handing over Bitcoin NFTs to them, you receive a custody certificate that can be traded on the Ethereum mainnet, and you can claim the corresponding NFT based on the custody certificate.

Sellers use Emblem Vault to mint a "Vault" NFT and transfer the NFT they wish to sell to the Bitcoin network address specified by Emblem Vault. When assets are detected in that Bitcoin network address, the "Vault" NFT will be displayed on OpenSea with the cover image and description set by the seller.

Once a buyer purchases the "Vault" NFT on OpenSea, the seller loses control over that "Vault" NFT. The buyer can choose to continue selling on OpenSea or go to the Emblem Vault official website to perform the "Open" operation on the "Vault" NFT. Once the "Open" operation is executed, the "Vault" NFT will be delisted from OpenSea and destroyed, and the private key for the Bitcoin network address holding the corresponding NFT asset will be given to the "Open" operator.

Seller Operation Process

Required Resources:

• Sparrow Wallet

• 250 $COVAL

First, go to the Emblem Vault official website to mint the "Vault" NFT.

Confirm everything is correct and click "Next" to proceed to the next settings page.

Confirm everything is correct and click "Next" to proceed to the final settings page.

After completing the settings, click "Create Vault" to create the Vault. Once created, select "BTC/SCP/OMNI" from the options under "Deposit Addresses" to get the address specified by Emblem Vault for storing Bitcoin NFT assets.

Next, open Sparrow Wallet and transfer the Bitcoin NFT to that address. Import the address containing the Bitcoin NFT assets into Sparrow Wallet and click on the "UTXOs" option in the left navigation bar.

Select the UTXO that belongs to the NFT you want to transfer to Emblem Vault for circulation on the Ethereum mainnet. This step requires great caution; ensure that the selected UTXO contains the NFT, and only select this item for subsequent operations! If you are unsure whether the UTXO contains the NFT, right-click to bring up the menu, select "Output," and then click "Copy Transaction Output" to paste the copied result into the Ordinals official website for verification.

Then click "Send Selected." Fill in the "Pay To" box with the address provided by Emblem Vault for storing Bitcoin NFT assets (the "BTC Deposit Address" shown in the previous setup images), and fill in the "Label" box with the name of the Vault NFT (the "Vault Name" shown in the previous setup images). The other options do not need to be filled in or modified. Here, it is crucial to confirm that this transaction is definitely 1 Input - 1 Output! The correct transaction structure should look like the red box in the image below, with only xxxx Inscription… on the left, and the top of the right side must be Send inscr…, followed by the fee prompt.

Next, click "Create Transaction" (here, you still need to check whether the transaction structure is as shown in the image above; otherwise, you need to redo the operation), then "Finalize Transaction for Signing," "Sign," and "Broadcast Transaction" to submit the transaction.

After the transaction is submitted, return to Emblem Vault and find the Vault you just created under "My Vaults" in the "Not Minted" directory. When Emblem Vault confirms receipt of the assets, the "Balance" column will show a certain balance. Click "Mint Vault" to submit the mint request (Mint requires spending 250 $COVAL), and once the minting is complete, you can trade the obtained Vault NFT on OpenSea.

You may have two questions at this point:

What is the Vault NFT I received?

The Vault NFT you received is the "custody certificate" provided by Emblem Vault. Since the Bitcoin NFT has already been entrusted to the wallet specified by Emblem Vault, only the owner of the Vault NFT can obtain the private key/seed phrase to unlock this wallet and gain control over the NFT. You cannot obtain the private key/seed phrase for this wallet in advance, because once the operation to obtain it is executed, the corresponding Vault NFT will be immediately delisted and destroyed.

When transferring transactions using Sparrow Wallet, is there a need for additional Bitcoin as Gas fees in the wallet?

No, there is not. Although the Ordinals protocol writes data into a single satoshi to give Bitcoin NFT attributes, in fact, what Ordinals creates upon minting is a UTXO with 10,000 satoshis, with the satoshi as the NFT being sorted first in the output. When the transaction is in the 1 Input - 1 Output scenario, according to the first-in-first-out principle, the satoshi as the NFT will be allocated to 1 Output first, followed by the second, third, and so on until the value sent to the recipient is reached. This means that the satoshis other than the one as the NFT will be used to pay for Gas fees. Each time such a transfer occurs, the UTXO will become smaller and smaller until eventually, other UTXOs must be used to ensure the NFT does not get lost.

Since the Bitcoin NFTs on the market are still very new, transferring in a 1 Input - 1 Output transaction structure can basically ensure that the NFT does not get lost. Again, it is emphasized that you must ensure that only 1 Bitcoin NFT is transferred each time, the transaction is in the 1 Input - 1 Output scenario, and the transaction structure is "only xxxx Inscription… on the left, and the top of the right side must be Send inscr…". It is strongly recommended to use a combination of a Bitcoin full node and Ordinals Wallet for transfers to ensure everything goes smoothly.

Buyer Operation Process

The buyer's operation process is relatively simpler, mainly involving purchasing the corresponding Vault NFT on OpenSea, executing the "Open" operation on Emblem Vault to obtain the private key/seed phrase for the address holding the Bitcoin NFT, and transferring the Bitcoin NFT to the corresponding wallet.

First, go to the OpenSea page of Emblem Vault to select a Bitcoin NFT. Be careful not to be misled by fake series; the total transaction volume of the genuine series is very high, close to 40,000 ETH, which is a relatively direct indicator.

Check the BTC-related options in the filter on the left to filter out Bitcoin NFTs traded through Emblem Vault mapped to the Ethereum mainnet.

Here is another key point to avoid scams. As shown in the image above, many Bitcoin Punks are not expensive. However, in reality, the transaction price of genuine Bitcoin Punks is generally above 0.5 ETH. These low-priced Bitcoin Punks are not even fake images; they simply do not contain any Bitcoin NFTs in the Vault.

As mentioned earlier, when creating the Vault NFT, its settings determine the name, cover image, and description displayed on OpenSea. Therefore, the Bitcoin NFTs listed on OpenSea are not actually associated with the assets stored in the Vault; even if only 1 dollar worth of Bitcoin is stored in the Vault, it will still be displayed on OpenSea (if no assets are stored in the Vault, it will indicate that this is a Vault with no assets).

The steps to check are as follows. First, check whether the corresponding Bitcoin NFT is included in the Vault. Find the "View website" option on OpenSea and click it.

After redirecting, click "BTC/SCP/OMNI" under "Deposit Addresses" to get the address where the Vault stores its assets.

Next, go to the Bitcoin Punks official website to find the link for this Punk on Ordinals Explorer, where you can directly see the current address where the genuine Punk is stored (if it is a project without an official website, you can check the series ID table on Discord, input the ID into Ordinals Explorer for inspection).

The image shows that the current storage address of the genuine Punk is bc1puur…, while the address specified by the Vault is 15ub…, which are inconsistent, indicating that the item on OpenSea is identified as fake.

For the Bitcoin Punks series, a helpful user has developed a quick screening tool that allows you to input the OpenSea link for verification. Other Bitcoin NFT series can only be manually screened using the steps mentioned above for now.

After the purchase is completed, you can see the Vault NFT you own on the "Locked" page of "My Vaults" in Emblem Vault. You can perform the "Claim (Crack Open Vault)" operation to obtain the private key/seed phrase for the address holding the corresponding Bitcoin NFT.

Finally, import the wallet and transfer the Bitcoin NFT.

Conclusion

Emblem Vault has significantly improved the liquidity of Bitcoin NFTs at this stage. For sellers, being able to sell their Bitcoin NFTs on OpenSea undoubtedly greatly enhances the efficiency of transaction matching. For buyers, trading directly on OpenSea greatly lowers the technical threshold. At the same time, Emblem Vault also solves the mutual trust issue between buyers and sellers, reducing the risk of one party absconding with the funds.

(Since Emblem Vault brought Bitcoin NFT trading to the Ethereum mainnet, the transaction volume of its Vault NFT series has significantly increased.)

However, the effect of Emblem Vault in lowering the technical threshold for Bitcoin NFTs is still limited. There are too many issues to pay attention to when transferring Bitcoin NFTs, especially for collectors who want to store Bitcoin NFTs in their own Bitcoin wallets; various operations can be quite torturous.

We still look forward to the Ordinals team or other developers to bring us simple and quick lightweight wallet applications in the future. Even with the still quite complex Emblem Vault, we can see the consumption potential of this emerging market for Bitcoin NFTs. We believe that once various supporting "infrastructures" are in place, Bitcoin NFTs will definitely unleash greater energy.