MakerDAO Flags Risks Justin Sun’s Role in WBTC Custody Changes
The post MakerDAO Flags Risks Justin Sun’s Role in WBTC Custody Changes appeared on BitcoinEthereumNews.com.
MakerDAO, a prominent player in the decentralized finance (DeFi) sector, is assessing the impact of the upcoming Wrapped Bitcoin (WBTC) custody shifts on its risk management framework. Due to BitGo, a major WBTC custodian, recent statement that it would transfer the control of the product to a new joint venture with BiT Global, the governance-focused DAO has adopted a rather conservative approach. MakerDAO Flags Risks Justin Sun’s Role MakerDAO is considering several measures to minimize risks related to changes in Wrapped Bitcoin custody. This review follows an update from BitGo, the current custodian of the product, on the transfer of control and operational jurisdictions. This change is partly due to collaboration with Justin Sun and the Tron ecosystem, which now will bring Sun’s level of control and influence over the joint venture that will regulate WBTC. Since Sun has had previous associations with other crypto projects, including TUSD and Huobi’s USDT reserves, which faced some operational and transparency problems, the community has raised its concerns. Given these developments, the firm is currently considering possible measures to mitigate risk for its platform and its users. The governance activities on-chain and off-chain reflect a rather conservative attitude towards the process. At the same time, there is a suggestion to reduce the share in the firm’s vaults significantly. Whoa. @MakerDAO proposal by BA Labs to close all new WBTC debt. Presumably offboarding would follow a few months laterhttps://t.co/jTiEz7C9SY — PaperImperium (@ImperiumPaper) August 10, 2024 This entails potentially setting the debt ceilings on various collateral integrations, for instance, WBTC-A, B, and C, to zero until the future of custodial frameworks is more clearly understood. Additionally, there is a suggestion to cease the products borrowing on SparkLend, another service linked to the firm, and to decrease the LTV ratio to 0%. These proposed actions highlight…
Filed under: News - @ August 11, 2024 9:02 pm