The post Threshold proposes partnership with BitGo to save WBTC through decentralized custody appeared on BitcoinEthereumNews.com.

Bitcoin decentralized finance protocol Threshold Network has proposed a partnership with BitGo to save  Wrapped Bitcoin (WBTC). In a proposal submitted on August 30, MacLane Wilkison wants to transition WBTC from its current centralized custody to Threshold’s decentralized system. The proposal follows recent controversies about BitGo’s plan to adopt a multijurisdictional WBTC custody and transfer WBTC control to a joint venture. The plan faced resistance from the DeFi community due to Justin Sun’s involvement in the joint venture. Merger of tBTC and WBTC According to Wilkinson, this proposal will address concerns about WBTC’s future. Under the plan, WBTC minting will change to a decentralized and permissionless system with BitGo and Threshold as partners. BitGo will have full minting/redemption privileges, while Threshold Decentralized Autonomous Organization (DAO) will take over governance of WBTC from the WBTC DAO. If approved, the proposal will also mark the end of tBTC, as its existing supply will be merged with that of WBTC through a 1:1 token swap. After that, WBTC’s total value locked will migrate to Threshold decentralized custody. Wilkinson explained that such a proposal will combine the capabilities of both WBTC and tBTC to create a better product, describing it as a better alternative than the partnership with BitGlobal He said: “Combining WBTC’s user base, integrations, liquidity, and brand recognition with tBTC’s decentralized custody and permissionless bridging mechanism can better achieve BitGo’s stated objective of multijurisdictional and multiinstitutional custody.” Meanwhile, the proposal includes a fallback plan if BitGo declines the offer and proceeds with the joint venture custody. In that case, Threshold Network wants to position itself as the safe alternative for WBTC and attract DeFi market participants to its product. Threshold proposal might save WBTC Threshold believes its proposal will benefit the DeFi ecosystem by allowing WBTC to remain operational without the risks…

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Filed under: News - @ August 30, 2024 2:22 pm