Sky has announced the start of the process to remove Wrapped Bitcoin (WBTC) from its SparkLend platform, beginning on September 26 through executive votes.
Sky Removes WBTC from SparkLend
Sky has released its second notice for the removal of Wrapped Bitcoin (WBTC) from its lending platform, SparkLend. The process will affect the WBTC-A, WBTC-B, and WBTC-C vaults and is part of a broader risk mitigation strategy. The redemption process, according to Block Analitica, will commence with an executive vote scheduled for September 26.
Custody Issues and TRON Involvement
The removal of WBTC from Sky has attracted the attention of industry analysts and blockchain experts, given Sky's significance in the DeFi space and their issuance of the decentralized stablecoin DAI. The WBTC removal plan follows major changes in WBTC custody. Early in January, crypto custody firm BitGo, which is behind WBTC, announced plans to transfer control of the asset to a joint operation with a new custody platform, raising questions regarding the involvement of TRON founder Justin Sun.
Warning to Users
Users of WBTC in legacy vaults and SparkLend are urged to take immediate action to close their positions to avoid liquidation. This could impact approximately $200 million in loans registered within the Sky ecosystem. Wrapped Bitcoin is a popular token representing Bitcoin on other blockchains, with a market cap of nearly $9 billion, and is significant in DeFi, particularly for loan collateral.
Users of the SparkLend platform are advised to follow Sky's recommendations and close their positions to minimize risks. The removal of WBTC from the platform reflects Sky's efforts to reduce risks within its ecosystem.
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