The recently rebranded Sky (formerly MakerDAO) has proposed to remove Wrapped Bitcoin (wBTC) from its ecosystem due to concerns over its close ties to Tron founder Justin Sun.
According to the latest reports, Sky will hold a governance vote to remove wBTC as collateral in its ecosystem. The decision is driven by concerns regarding wBTC’s connection to Justin Sun, which has raised red flags about the centralization of the asset.
Sky to Remove wBTC from Ecosystem
Sky’s proposal to delist wBTC comes at a time when the platform holds around $200 million in loans collateralized by the token. Experts view this as a significant development for the DeFi sector, with many highlighting the potential impact on decentralized finance.
BA Labs, a risk management firm in the DeFi space, has voiced concerns over the centralized nature of wBTC due to Justin Sun’s relationship with its custodian. As a result, the firm has recommended that the platform consider alternatives.
If the proposal is accepted, BA Labs has suggested introducing new products to the platform. Alternatives mentioned include dlcBTC, Threshold’s tBTC, FBTC backed by Mantle Network, and cbBTC, Coinbase’s own token.
Concerns Over Centralization
An analyst representing the DAO, monet-supply, highlighted the risks associated with wBTC, stating:
“Stablecoins and custody products linked to Justin Sun have a troubling history and pose high counterparty risk.”
The delisting process for wBTC from Sky is planned to begin on September 26 and will take place in five phases.
Currently, Sky’s SparkLend platform holds $73 million in wBTC-backed loans and an additional $127 million in wBTC debt, making the transition a crucial moment for the platform.
As the DeFi world watches these developments unfold, it’s clear that the potential delisting of wBTC from Sky will be a major shift for the ecosystem. Deythere will continue to follow the story as the governance vote progresses and the DeFi sector reacts.
Wrapped Bitcoin delisting, DeFi sector update, Justin Sun wBTC, Sky governance vote, DeFi risk management
