{"id":353340,"date":"2024-09-23T06:49:10","date_gmt":"2024-09-23T01:19:10","guid":{"rendered":"https:\/\/dripp.zone\/news\/?p=353340"},"modified":"2024-09-23T06:49:10","modified_gmt":"2024-09-23T01:19:10","slug":"sky-votes-to-remove-wrapped-bitcoin-as-collateral-amid-community-concerns-crypto-news","status":"publish","type":"post","link":"https:\/\/dripp.zone\/news\/sky-votes-to-remove-wrapped-bitcoin-as-collateral-amid-community-concerns-crypto-news\/","title":{"rendered":"Sky votes to remove Wrapped Bitcoin as collateral amid community concerns – Crypto News"},"content":{"rendered":"
\n

Sky, formerly MakerDAO, decided<\/a> to remove the usage of Wrapped Bitcoin (WBTC<\/a>) as collateral for borrowing through a governance vote concluded on Sept. 19.<\/p>\n

BA Labs, the former Risk Core Unit, was named stability advisor for the process. The entity also suggested removing WBTC as a collateral option.<\/p>\n

Starting Oct. 3, SparkLend, the money market in the Sky ecosystem, will start reducing the collateral cap for using WBTC as collateral for borrowing. Additionally, measures such as reducing the liquidation threshold and raising linear interpolation will be implemented to make WBTC vaults less attractive to users.<\/p>\n

According to the proposal<\/a>, the whole process is expected to end on Nov. 14, but it could potentially take more time.<\/p>\n

SparkLend\u2019s dashboard<\/a> shows that WBTC is used as collateral for $61.2 million in debt on the platform Most of WBTC\u2019s liabilities are in DAI, one of Sky\u2019s ecosystem native stablecoins.<\/p>\n

Of the 108,689 Maker (MKR) tokens allocated as votes, 95,826 MKR (88.1%) voted favorably for the wind-down plan. Moreover, the vote had 12,863 MKR (11.8%) in abstentions and no votes against the proposal.<\/p>\n

Changes in WBTC raise concerns<\/h2>\n

BA Labs\u2019 proposal in Sky\u2019s governance followed\u00a0<\/span>BitGo\u2019s<\/a> announcement of a multi-jurisdictional custody model to accelerate a global expansion plan. The plan includes a joint venture with\u00a0<\/span>BiT Global, with the new joint venture gaining direct control over WBTC.<\/p>\n

The move led to several concerns in the industry, which intensified after 12,000 BTC were removed from USDD\u2019s backing, which was also included<\/a> in the BA Labs proposal. USDD is the stablecoin tied to the TRON ecosystem.<\/p>\n

Mike Belshe, CEO at BitGo, was actively trying<\/a> to avoid the removal of WBTC as collateral on SparkLend. Belshe even stated that the move would hurt users who don\u2019t have the necessary stablecoin amount to remove their WBTC as collateral from the platform.<\/p>\n

However, the BitGo CEO\u2019s argument was not enough to sway voters and prevent the removal of the synthetic Bitcoin (BTC<\/a>) from SparkLend\u2019s collateral list.<\/p>\n

Additionally, Aave<\/a> is also assessing the risks of having WBTC as a viable collateral option, with a Sept. 18 proposal<\/a> by LlamaRisk pushing to reduce the loan-to-value in WBTC vaults to zero. The proposal also suggested lowering supply and borrowing caps.<\/p>\n

Both Sky and Aave are looking for options to replace WBTC, such as Coinbase\u2019s cbBTC and Threshold\u2019s tBTC.<\/p>\n

Mentioned in this article<\/h6>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Sky, formerly MakerDAO, decided to remove the usage of Wrapped Bitcoin (WBTC) as collateral for borrowing through a governance vote concluded on Sept. 19. BA Labs, the former Risk Core Unit, was named stability advisor for the process. The entity also suggested removing WBTC as a collateral option. Starting Oct. 3, SparkLend, the money market […]<\/p>\n","protected":false},"author":2,"featured_media":353346,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[274,273,272,244,266,271,268,270,269,267],"class_list":["post-353340","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-de-fi","tag-crypto-finance","tag-decentralized-finance","tag-liquidity","tag-metamask","tag-pancake","tag-slippage","tag-sushiswap","tag-tronlink","tag-trust-wallet","tag-uniswap"],"_links":{"self":[{"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/posts\/353340","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/comments?post=353340"}],"version-history":[{"count":2,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/posts\/353340\/revisions"}],"predecessor-version":[{"id":353348,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/posts\/353340\/revisions\/353348"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/media\/353346"}],"wp:attachment":[{"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/media?parent=353340"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/categories?post=353340"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/tags?post=353340"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}