As an experienced crypto investor with a keen eye for potential risks and a knack for navigating the complex landscape of decentralized finance (DeFi), I find Sky’s decision to reconsider Wrapped Bitcoin (WBTC) as collateral on SparkLend intriguing.
Previously known as MakerDAO, Sky is currently considering taking Wrapped Bitcoin off SparkLend due to worries about its connection with Justin Sun.
Sky may be planning to eliminate Wrapped Bitcoin (WBTC) as a form of collateral on its DeFi platform SparkLend, due to apprehensions about the token’s connections with TRON’s founder, Justin Sun.
Starting on September 26th, the team associated with Sky plans to gradually withdraw WBTC-A, WBTC-B, WBTC-C, and WBTC from SparkLend – a decentralized, non-custodial liquidity platform. This multi-step process is intended to unfold.
The decision comes in response to recent developments involving BitGo and its upcoming partnership with BitGlobal, which is understood see control of WBTC shift to a joint venture linked to Sun.
As a crypto investor, I heed Sky’s advice to wind down my WBTC Legacy Vaults and positions on SparkLend, aiming to steer clear of potential liquidation. This move is prompted by apprehensions about heightened counterparty risks due to Sun’s sway, echoing troubles that have surfaced with other ventures linked to him, such as the TrueUSD stablecoin.
The controversy surrounding WBTC intensified after a proposal from BA Labs highlighted potential risks associated with Sun’s influence. In a forum post on Aug. 10, BA Labs suggested that recent custody changes and historical issues with Sun-affiliated products warranted caution.
In summary, having Sun as a major stakeholder in the new WBTC partnership carries an unacceptably high degree of risk.
BA Labs
Mike Belshe, BitGo’s CEO, upheld the security measures they have in place, implying that the suggestion to transfer Wrapped Bitcoin (WBTC) might stem less from factual considerations and more from the association with Justin Sun.
Despite this, he openly acknowledged that the BitGo team had apprehensions about people’s potential reaction to him (Justin Sun), which is why they chose to disclose his participation from the beginning, although he wouldn’t possess the power to transfer funds freely.
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2024-09-13 11:31