Sky, formerly known as Maker, is reconsidering its plan to offboard Wrapped Bitcoin (WBTC) from its lending protocol following new recommendations from one of its key advisors, BA Labs.
BA Labs Recommendations
On September 24, BA Labs recommended pausing the WBTC offboarding plan following a lengthy discussion on Sky’s governance forum with BitGo co-founder Mike Belshe. During the discussion, BitGo clarified changes in the management or custody of WBTC, control of the signing keys, and commitment to provide advance notice of changes.
BitGo's Reaction
BitGo committed to providing at least 60 days of public written notice before any future changes to entities controlling WBTC keys. Belshe emphasized that the company has always adhered to this '60-day standard.' BA Labs team member and DAO delegate 'monet-supply' said that considering these commitments and the overall WBTC exposure having fallen to $170 million in total borrowing, the collateral risk is in a 'more acceptable range.'
Next Steps
An executive vote on the new recommendations is scheduled for October 3. Meanwhile, SparkLend’s exposure to WBTC has fallen to $61 million. In August, BitGo entered a partnership with BitGlobal to transfer the custody of WBTC, raising concerns among the Sky community. This led to a governance vote on September 19 for a proposal to offboard WBTC collateral, which passed with 88% in favor of a five-step process beginning in early October. Belshe's responses indicated frustration while emphasizing BitGo’s track record and commitments.
The upcoming executive vote will determine the next steps in the WBTC offboarding process for Sky.
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