This is a verilog project to be realised in a "rideshare" open source ASIC organised by Tiny Tapeout.
For more, read the Tiny Tapeout documentation
Read the docs linked above, TBD
The rotary encoder adds/subtracts from a variable that determines which LED to turn on. Periodically, the chip sends out a signal for 12 LEDs out via uo0, according to the WS2812B protocol. Further, the register value of the variable will be put out via uo2 to uo5. The button connected to in2 toggles the LEDs.
TinyTapeout is an educational project that aims to make it easier and cheaper than ever to get your digital designs manufactured on a real chip. Each run, one or more tiles can be bought on the overall chip and filled with custom designs.
To learn more and get started yourself, visit https://tinytapeout.com and/or Join the community.