MakerDAO may adjust wrapped Bitcoin (WBTC) policy due to Justin Sun risk concerns
The post MakerDAO may adjust wrapped Bitcoin (WBTC) policy due to Justin Sun risk concerns appeared on BitcoinEthereumNews.com.
BA Labs on MakerDAO wants the Maker protocol to limit exposure to wrapped Bitcoin (WBTC). The recommendation follows the news that WBTC issuer BitGo will partner with BitGlobal to transfer WBTC control to a new joint venture involving Tron founder Justin Sun. The joint venture will now manage WBTC, and custody of the BTC reserves backing WBTC will be split across three jurisdictions, including Hong Kong and Singapore, instead of the US alone. Although Sun has assured users that these changes will not affect WBTC, many DeFi stakeholders think otherwise. MakerDAO to vote on limiting WBTC exposure To limit potential risks, BA Labs recommends that Maker restrict the growth of WBTC on the protocol by reducing the use of WBTC in three core Maker vaults to zero and disabling WBTC borrowing on SparkLend. These changes will limit new loans from using WBTC as collateral on all MakerDAO protocols if implemented. The team believes this action is necessary due to Justin Sun’s history. They are concerned about past events involving all projects associated with the crypto entrepreneur, such as TUSD stablecoin, stUSDT, and HTX. Additionally, they mentioned that BitGo’s decision, following its unsuccessful acquisition by Galaxy, indicates potential issues within the company. BitGo CEO Mike Belshe has denied this. Interestingly, BA Labs is not the only one who shares these concerns. Jupiter founder Meow also questioned the partnership, particularly how parties would benefit from it and whether the BTC in the reserves would be used for any purpose. Meow has offered to host a forum for all parties to clarify concerns about the joint venture. Meanwhile, the MakerDAO ecosystem team has approved the recommendations from the BA Labs, and the community will now vote on the proposal on Monday, August 12, 2024. Some community members have complained that the risk might…
Filed under: News - @ August 11, 2024 6:12 pm