**BREAKING: MakerDAO Pauses Decision on the Future of Binance-Listed Cryptocurrency**
In a significant turn of events, the decentralized finance (DeFi) lender Sky, previously known as MakerDAO, has opted to reassess its strategy regarding the use of Wrapped Bitcoin (WBTC) as collateral. This decision follows a pivotal meeting with BitGo CEO Mike Belshe.
The shift comes amidst ongoing worries about the custody of the Bitcoin that backs WBTC, alongside guidance from Sky’s prominent advisor, BA Labs. WBTC, a token designed to facilitate Bitcoin (BTC) transactions on alternative blockchains like Ethereum, is widely utilized as collateral in DeFi lending, boasting a market capitalization of $9.7 billion. Concerns within the Sky community escalated in August when BitGo, the original custodian of Bitcoin supporting WBTC, transferred its custody responsibilities to a partnership involving Tron founder Justin Sun.
BA Labs expressed apprehension regarding Sun’s role, particularly since approximately $200 million in loans on Sky’s platform were tied to WBTC collateral. In a recent community vote, members agreed to BA Labs’ recommendation to initiate a phase-out of WBTC starting in October.
Despite this initial consensus, discussions progressed, with Belshe engaging directly with the community on Sky’s forum. He clarified that Sun would not possess unilateral authority over the custody arrangement, emphasizing that BitGo and BitGo Singapore, responsible for managing the multi-signature keys for the new custodian, would retain operational independence. Belshe reassured the community that “BitGo or BitGo Singapore will not have the ability to ‘make changes to key management practices.’”
On Tuesday, BA Labs acknowledged Belshe’s clarifications, indicating increased comfort with the current state of WBTC operations and key management. They highlighted a significant reduction in exposure to WBTC collateral, which has now dropped to around $170 million in total borrowing, thereby mitigating associated risks to more manageable levels.
“While we still harbor concerns about BitGlobal acting as a signer for WBTC, we no longer believe the collateral situation warrants immediate removal,” BA Labs stated, suggesting a temporary halt in the removal process.
This decision to continue using WBTC as collateral emerges against a backdrop of intensifying competition in the Wrapped Bitcoin landscape. Alternatives such as dlcBTC, powered by Mantle Network, Threshold’s tBTC, and FBTC are gaining prominence. Additionally, Coinbase has recently introduced its own Wrapped BTC competitor, cbBTC, further heightening competition in this arena.
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