Sky’s governance participants have voted to remove WBTC collateral support from the lending platform, with all the tokens expected to be removed from the protocol by November 28.
Sky, formerly MakerDAO, is removing WBTC from its accepted collateral after its community voted to have it removed. The governance vote occurred over three days, closing on September 19. Only 13 Sky whales took part in the voting process, with 88.17% approving WBTC’s removal and 11% abstaining from picking an option. Nobody voted to keep the asset as collateral. Around 95,826 MKR tokens were pledged for the vote.
Source: Sky
With that, the decentralized lending protocol will remove WBTC in phases, beginning on October 3 and ending on November 28. The decision to not associate with the bitcoin wrapper stems from its issuer, BitGo, partnering with Hong Kong-based BiT Global. Both firms agreed to issue WBTC in tandem, which meant that WBTC would be held in joint custody between the firms.
Concerns arose from there as Tron-founder Justin Sun partly owns BiT Global, and his reputation is not the best when it comes to being transparent. The bitcoin on Tron product offered by Poloniex does not post proof-of-reserves, effectively remaining opaque about the bitcoin backing the product. That product, Tron, and Poloniex are Sun-owned ventures.
Sky Will Replace WBTC With Other Bitcoin Wrappers; Another Protocol Reduces WBTC Exposure
As Sky kicks WBTC out, it will bring in alternatives. Currently, discussions within Sky’s community revolve around adopting Coinbase’s cBTC or Treshold’s tBTC. While that occurs, other protocols are also considering eliminating WBTC exposure. Big-name DeFi protocol Aave has also witnessed its community bringing a proposal against WBTC, albeit capping the amount of collateral that can exist in the token rather than removing it altogether.
While misconceptions arose about the protocol completely removing its exposure to the bitcoin wrapper, its co-founder corrected them on X. “This is incorrect. Aave is not offboarding wBTC, this is a proposal from one of the risk providers to cap wBTC. Study Aave DAO first.”
