Sky, the decentralized finance lender formerly known as MakerDAO, has received overwhelming community support to offboard wrapped bitcoin (WBTC) as collateral, following a recent vote that closed on Thursday.
The decision is significant for the crypto market, given that the Sky platform currently holds $200 million in loans backed by WBTC, which is one of the largest cryptocurrencies with nearly $10 billion in circulation.
The initiative to reduce exposure to WBTC was first proposed by BA Labs, a key advisor to the project, in August. The official proposal to eliminate this exposure was confirmed last week, prompting the community vote.
The vote, which commenced on Monday and ran for three days, saw 88% of participants favoring the removal of WBTC through a five-step offboarding process, while 12% chose to abstain.
With the vote concluded, Sky will initiate the offboarding process on October 3, with the final phase expected to wrap up by November 28.
BA Labs cited potential risks related to Tron founder Justin Sun’s involvement with BiTGlobal, the custodian for the underlying assets, as part of its rationale. BitGo, the original custodian for WBTC, announced in August its plans to transition control to a joint operation with BiTGlobal, which has regulated operations in Hong Kong.
In response to the concerns, Sun defended WBTC’s reliability, stating it has a “sterling track record unmatched by competing offers.”
WBTC enables investors to utilize bitcoin (BTC) on other blockchains, particularly Ethereum, and plays a crucial role in the DeFi lending ecosystem as collateral. Currently, WBTC has a market capitalization of approximately $9.7 billion.
In a related development, The Defiant reported that the community surrounding Aave, the largest DeFi lender, remains skeptical about the necessity of offboarding WBTC as collateral.
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