DeFi Lender Sky Ratifies Plan to Offboard Wrapped Bitcoin, Due to Sun Concerns
The matter has been closely followed in crypto markets, since the Sky platform has $200 million of loans collateralized by the token, and since WBTC is one of the biggest cryptocurrencies, with nearly $10 billion outstanding.
Updated Sep 19, 2024, 9:32 p.m. Published Sep 19, 2024, 9:29 p.m.
Sky, the decentralized finance lender previously known as MakerDAO, will move forward with a plan to offboard wrapped bitcoin (WBTC) as collateral, following a vote that closed on Thursday and garnered overwhelming support from the project's community.
The matter has been closely followed in crypto markets, since the Sky platform has $200 million of loans collateralized by the token, and since WBTC is one of the biggest cryptocurrencies, with nearly $10 billion outstanding.
BA Labs, an influential advisor to the project, had initially floated the idea of reducing exposure to WBTC in August, before confirming the plan last week with an official proposal to move ahead with the vote to eliminate the exposure entirely.
This week's Sky vote, which went live on Monday and was open for three days, and saw 88% of participants vote in favor of ditching wBTC in five separate proposals for a five-step offboarding process. Some 12% abstained.
Following the vote, Sky will move forward with the offboarding of WBTC, with the first phase starting on Oct. 3 and culminating in the final phase on Nov. 28.
BA Labs, in its proposals to offboard WBTC, had cited perceived risks from Tron founder Justin Sun's involvement with BiTGlobal, the custodian for the underlying assets. BitGo, the original custodian for WBTC, announced in August that it planned to transition control of the asset to a joint operation with BiT Global, which has regulated operations based in Hong Kong.
Sun told CoinDesk last week that WBTC has a "sterling track record that is unmatched by any competing offers recently floated by the skeptics."
WBTC is a token that allows investors to use bitcoin (BTC) on other blockchains, such as Ethereum, and often is at the center of the DeFi lending space as collateral. WBTC currently has a $9.7 billion market capitalization.
Separately, The Defiant reported that the community behind Aave, the biggest DeFi lender, is unconvinced of the need to offboard WBTC as collateral.
Read more: DeFi Lending Giant Sky Sets Vote to Offload Wrapped Bitcoin as Justin Sun Concerns Linger
Margaux Nijkerk
Margaux Nijkerk reports on the Ethereum protocol and L2s. A graduate of Johns Hopkins and Emory universities, she has a masters in International Affairs & Economics. She holds a small amount of ETH and other altcoins.
