- Reasons for Offboarding Wrapped Bitcoin
- Offboarding Process and Steps
- Alternative Strategies for Bitcoin Collateral
Decentralized finance platform Sky, formerly Maker, has proposed dropping Wrapped Bitcoin (WBTC) as ecosystem collateral due to concerns about the token's ties to Justin Sun.
Reasons for Offboarding Wrapped Bitcoin
Sky's team announced on the protocol’s governance forum that it plans to offboard WBTC on SparkLend, its decentralized non-custodial liquidity protocol. The reason cited is “recent changes in WBTC ownership and control, likely involving Justin Sun or affiliates.”
Offboarding Process and Steps
The offboarding process will start on September 26 and will be conducted in several steps through multiple executive votes. Users are advised to close their WBTC positions on SparkLend to avoid liquidation.
Alternative Strategies for Bitcoin Collateral
Alternative assets like Coinbase’s cbBTC and Threshold’s tBTC are being suggested to replace WBTC. Sky and Spark are also investigating Bitcoin staking and restaking products.
Control of WBTC is expected to be handed over to a new venture led by BitGlobal by October 8, 2024. Therefore, the Sky team plans to begin derisking collateral exposure by that time.
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