MakerDAO users have green-flagged a proposal to put brakes on new borrowings against WBTC.
The aforementioned approval comes on the heels of the recent BitGo controversy. To recall, BitGo unveiled its plans to transfer the control over WBTC to a joint venture consisting of itself, Hong Kong-based investment manager BiT Global, and Justin Sun’s Tron ecosystem.
On the heels of the announcement, DeFi users red-flagged the involvement of Sun and called for WBTC support to be revoked from major protocols.
On Aug. 10, Block Analitica [BA] published a proposal on MakerDAO’s governance forum asking the protocol to wind all new WBTC debts and halt new borrowing against WBTC as collateral. The proposal highlighted,
“We find that Sun’s involvement as a controlling interest in the new WBTC joint venture presents an unacceptable level of risk.”
While addressing security concerns, BitGo CEO Matt Belshe underlined that the controversy stemmed from improper assessment of facts. Meanwhile, Sun defended that there’d be “no changes to WBTC” and his association did not involve direct access to funds.
Alongside reducing the WBTC debt ceiling to zero, even the loan-to-value [LTV] ratio for WBTC was revised to 0% after the approval of the latest proposal.
That being said, it should be noted that the liquidation threshold has not been altered. This means, the aforementioned adjustments will not bear an effect on pre-existing loans that are backed by WBTC.
On the heels of the WBTC controversy, Coinbase teased the launch of a new product called “cbBTC” earlier this week. Community speculations point that the exchange is launching its own wrapped Bitcoin token variant.
Meanwhile, Ethereum-based staking project Swell recently introduced an LRT asset — 'swBTC.’ This token, in turn, generates yield using wBTC.
