Cocoons are found in the bedding. They look like small yellow balls, maybe a little elongated like a football.

I've never found cocoons on the sides of the bin. Although I don't have any hard evidence, I suspect that different worm species have slightly different cocoon laying patterns. Here's a photo of E. hortensis cocoons. E. fetida cocoons are a bit smaller. The color will change as the cocoon gets closer to hatching.

Andrew