Former MakerDAO to Vote to Sell All of Its wBTC

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Former MakerDAO to Vote to Sell All of Its wBTC
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Sky, formerly known as MakerDAO, is set to hold a crucial executive vote on September 26, 2024. The DeFi community is on high alert as the vote will decide the removal of wBTC as collateral on the platform.

BA Labs was the one who came up with this proposal. The entity plays a significant role in DeFi risk management within the Sky ecosystem.

BA Labs’ main argument for delisting wBTC is growing concerns over Tron founder Justin Sun’s relationship with the custodian of wBTC assets.

wBTC custody was recently transferred to a joint operation between BitGo and BiT Global, a custody platform associated with the Tron ecosystem. This move, while billed as a decentralization of custody, has received criticism from the community, including BA Labs, who cited a lack of transparency and potential risks to users.

wBTC at the center of the debate

Sky currently holds around $200 million in wBTC-backed loans. These loans are spread across the SparkLend platform, which holds approximately $73 million, and Sky’s legacy vaults, which total $127 million.

The removal of wBTC will therefore have a significant impact on the platform, requiring a series of votes and steps for a smooth transition.

wBTC is a token that follows the ERC-20 standard, allowing Bitcoin to be used on other blockchains, such as Ethereum. However, growing concerns about wBTC’s decentralized custody have led to heated debates about its security and reliability.

The September 26 vote will be just the first in a series of executive decisions aimed at completely decoupling wBTC from the Sky ecosystem. BA Labs claims this is the only way to mitigate the risks related to Justin Sun’s involvement and protect the integrity of the platform’s assets.

With wBTC’s potential departure, competitors such as dlcBTC, tBTC, and FBTC could gain traction, in addition to recent initiatives such as Coinbase’s launch of cbBTC. The future of wrapped Bitcoin tokens looks promising, but also fraught with uncertainty and challenges.

Former MakerDAO to Vote to Sell All of Its wBTC

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Former MakerDAO to Vote to Sell All of Its wBTC

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Former MakerDAO to Vote to Sell All of Its wBTC

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