{"id":172170,"date":"2024-09-25T14:51:38","date_gmt":"2024-09-25T14:51:38","guid":{"rendered":"https:\/\/crypto-economy.com\/?p=172170"},"modified":"2024-09-25T14:51:41","modified_gmt":"2024-09-25T14:51:41","slug":"bitgo-forces-sky-to-rethink-wrapped-bitcoin-plan-major-update-for-wbtc-users","status":"publish","type":"post","link":"https:\/\/crypto-economy.com\/bitgo-forces-sky-to-rethink-wrapped-bitcoin-plan-major-update-for-wbtc-users\/","title":{"rendered":"BitGo Forces Sky to Rethink Wrapped Bitcoin Plan\u2014Major Update for WBTC Users"},"content":{"rendered":"<p style=\"text-align: justify\">TL;DR<\/p>\n<ul>\n<li style=\"text-align: justify\">Sky is <strong>reconsidering its decision to remove Wrapped Bitcoin (WBTC)<\/strong> after a recommendation from BA Labs and clarifications from BitGo.<\/li>\n<li style=\"text-align: justify\">BitGo commits to providing <strong>60 days&#8217; notice for any changes<\/strong> in WBTC custody, reducing the perceived risk.<\/li>\n<li style=\"text-align: justify\">A <strong>new vote on October 3<\/strong> will determine whether changes to liquidation and collateral policies in the protocol will be implemented.<br \/>\n<hr \/>\n<\/li>\n<\/ul>\n<p style=\"text-align: justify\"><strong>Sky<\/strong>, the pioneering <a href=\"https:\/\/crypto-economy.com\/defi-decentralized-finances\/\" target=\"_blank\" rel=\"noopener\"><strong>decentralized finance (DeFi)<\/strong> <\/a>platform, <strong>is reconsidering its decision to remove Wrapped Bitcoin (WBTC) as collateral within its lending protocol<\/strong> after receiving a new recommendation from BA Labs, one of its key advisers.<!--more--><\/p>\n<p style=\"text-align: justify\">On September 24, BA Labs proposed <strong>pausing the WBTC offboarding plan<\/strong> after an extensive <a href=\"https:\/\/forum.makerdao.com\/t\/wbtc-changes-and-risk-mitigation-10-august-2024\/24844\/41\" target=\"_blank\" rel=\"noopener\"><strong>discussion<\/strong> <\/a>with BitGo co-founder <strong>Mike Belshe<\/strong>, who provided several clarifications regarding the management and custody of the assets backing WBTC.<\/p>\n<p style=\"text-align: justify\">BitGo, which was recently the <strong>sole custodian of the Bitcoin backing WBTC<\/strong>, raised concerns within the Sky community after announcing a partnership with BitGlobal, <strong>a company linked to <a href=\"https:\/\/crypto-economy.com\/justin-sun-meet-the-creator-of-tron\/\" target=\"_blank\" rel=\"noopener\">Justin Sun<\/a><\/strong>. This led to a governance vote on September 19, in which <strong>88% of the Sky community supported<\/strong> a plan to gradually eliminate WBTC from the protocol. However, after receiving new clarifications from BitGo, <strong>BA Labs recommended reassessing the situation<\/strong>.<\/p>\n<p><img fetchpriority=\"high\" decoding=\"async\" class=\"alignnone size-full wp-image-172171\" src=\"https:\/\/crypto-economy.com\/\/wp-content\/uploads\/2024\/09\/bitgo-post.jpg\" alt=\"bitgo post\" width=\"825\" height=\"300\" srcset=\"https:\/\/crypto-economy.com\/\/wp-content\/uploads\/2024\/09\/bitgo-post.jpg 825w, https:\/\/crypto-economy.com\/\/wp-content\/uploads\/2024\/09\/bitgo-post-300x109.jpg 300w, https:\/\/crypto-economy.com\/\/wp-content\/uploads\/2024\/09\/bitgo-post-768x279.jpg 768w\" sizes=\"(max-width: 825px) 100vw, 825px\" \/><\/p>\n<h2 style=\"text-align: justify\">BitGo Must Maintain 100% Transparency<\/h2>\n<p style=\"text-align: justify\">BitGo committed to <strong>upholding a transparency standard<\/strong>, ensuring that any changes in WBTC custody will be publicly notified at least 60 days in advance. This commitment, along with a reduced exposure to WBTC to $170 million in total borrowing, led BA Labs to conclude that <strong>the current risk is manageable and that immediate removal of the collateral is unnecessary<\/strong>. Exposure to WBTC in SparkLend, one of Sky\u2019s platforms, also decreased significantly, reaching $61 million.<\/p>\n<p style=\"text-align: justify\">In the discussion, Mike Belshe expressed frustration at the possibility of Sky <strong>opting for Coinbase\u2019s cbBTC<\/strong>, a centralized option that does not offer proof-of-reserves. Belshe pointed out that this change <strong>could increase uncollateralized risk by up to one billion dollars,<\/strong> which could result in greater risk exposure for the platform.<\/p>\n<p style=\"text-align: justify\"><strong>On October 3, a new executive vote will decide whether to implement BA Labs&#8217; recommended changes<\/strong>. In addition to reconsidering the offboarding plan, <strong>adjustments to liquidation policies<\/strong> are being suggested, including <strong>reducing penalties and adjusting fees<\/strong> applied to Sky\u2019s lending products, such as Legacy Vaults and SparkLend.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>TL;DR Sky is reconsidering its decision to remove Wrapped Bitcoin (WBTC) after a recommendation from BA Labs and clarifications from BitGo. BitGo commits to providing 60 days&#8217; notice for any changes in WBTC custody, reducing the perceived risk. A new vote on October 3 will determine whether changes to liquidation and collateral policies in the &#8230; <\/p>\n<p class=\"read-more-container\"><a title=\"BitGo Forces Sky to Rethink Wrapped Bitcoin Plan\u2014Major Update for WBTC Users\" class=\"read-more button\" href=\"https:\/\/crypto-economy.com\/bitgo-forces-sky-to-rethink-wrapped-bitcoin-plan-major-update-for-wbtc-users\/#more-172170\" aria-label=\"More on BitGo Forces Sky to Rethink Wrapped Bitcoin Plan\u2014Major Update for WBTC Users\">Read more<\/a><\/p>\n","protected":false},"author":34,"featured_media":172173,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[100,70,74],"tags":[4602,4614,4656,9929],"_links":{"self":[{"href":"https:\/\/crypto-economy.com\/wp-json\/wp\/v2\/posts\/172170"}],"collection":[{"href":"https:\/\/crypto-economy.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/crypto-economy.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/crypto-economy.com\/wp-json\/wp\/v2\/users\/34"}],"replies":[{"embeddable":true,"href":"https:\/\/crypto-economy.com\/wp-json\/wp\/v2\/comments?post=172170"}],"version-history":[{"count":1,"href":"https:\/\/crypto-economy.com\/wp-json\/wp\/v2\/posts\/172170\/revisions"}],"predecessor-version":[{"id":172174,"href":"https:\/\/crypto-economy.com\/wp-json\/wp\/v2\/posts\/172170\/revisions\/172174"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/crypto-economy.com\/wp-json\/wp\/v2\/media\/172173"}],"wp:attachment":[{"href":"https:\/\/crypto-economy.com\/wp-json\/wp\/v2\/media?parent=172170"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/crypto-economy.com\/wp-json\/wp\/v2\/categories?post=172170"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/crypto-economy.com\/wp-json\/wp\/v2\/tags?post=172170"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}