Sky, previously known as MakerDAO, has decided to reconsider its plan to remove Wrapped Bitcoin (WBTC) from its list of collateral assets for DAI. This decision comes after addressing concerns about the involvement of Tron founder, Justin Sun, in WBTC’s management. BitGo CEO Mike Belshe directly addressed the issues on Sky’s governance forum, helping to restore confidence in WBTC within Sky’s ecosystem.
Previously, BA Labs – Sky’s risk management advisory unit – had proposed a roadmap to phase out WBTC due to concerns over Sun’s involvement. The Sky community had voted in favor of removing WBTC, partly due to BitGlobal (a company associated with Sun) being involved in the custody of WBTC. These concerns were primarily driven by BitGo transferring WBTC management to BitGlobal, raising fears about the potential negative impact on collateral management, especially with WBTC-backed loans exceeding $200 million on the platform.
However, Mike Belshe clarified that BitGlobal only controls one of the three security keys and does not have direct authority over the management processes of BitGo or BitGo Singapore. Belshe also committed that BitGo would give at least 60 days’ notice of any changes in WBTC custody or ownership, ensuring transparency. This has alleviated concerns within BA Labs, which has now proposed to indefinitely pause the removal of WBTC, as long as BitGo’s commitments are maintained.
While BA Labs still expressed some concerns regarding BitGlobal’s role, they acknowledged that the risk has been significantly reduced. The WBTC-backed loan exposure has now dropped to approximately $170 million, which falls within an acceptable risk range.
A new vote on adjusting technical parameters for WBTC is scheduled for October 3.
The situation surrounding WBTC has sparked competition from other Wrapped Bitcoin variants, such as Coinbase’s cbBTC, Threshold’s tBTC, and Mantle Network’s FBTC. Although cbBTC emerged as a potential competitor, its lack of transparency regarding proof of reserves has placed it at a disadvantage compared to WBTC. Currently, WBTC maintains its dominant position in the market, holding 68.8% market share, while cbBTC and tBTC collectively account for less than 2%.
The resolution of this controversy has led to a positive shift in how Sky manages its collateral assets, further solidifying WBTC’s standing in the DeFi space.
Related news: Sky (MakerDAO)’s New Stablecoin Hits $490 Million TVL in Just 5 Days
