- Reasons Behind Wrapped Bitcoin Removal
- Phased Removal Plan for wBTC
- Context and Potential Implications
Sky, the platform previously known as MakerDAO, is considering a proposal to completely remove wrapped Bitcoin (wBTC) from its ecosystem due to custody and control issues.
Reasons Behind Wrapped Bitcoin Removal
Announced on Thursday, Sky is considering a proposal to phase out wBTC exposure due to asset management issues by its custodian. According to a CoinDesk report, there are currently about $200 million in loans backed by wBTC on the Sky platform.
Phased Removal Plan for wBTC
The proposal, submitted by BA Labs, plans to phase out wBTC as collateral assets in five stages starting from September 26, with each step requiring a separate vote. Currently, SparkLend, owned by Sky, has around $73 million in loans collateralized with wBTC, and another $127 million in debt is tied to the token in older Sky vaults.
Context and Potential Implications
Tensions around wBTC increased after BitGo announced the transition of control to a new joint operation with BiT Global. This decision sparked controversy within the DeFi community. If the proposal by Sky moves forward, it will be closely monitored by analysts and observers due to its potential wide-reaching implications for the DeFi sector. Sky has already ceased to accept wBTC as collateral, making it practically unusable for DAI.
As one of the leading DeFi projects and the issuer of the stablecoin DAI, Sky's removal of wBTC could have significant implications for the entire DeFi sector, and analysts and observers will be closely watching the developments.
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