Sky Reconsiders Offboarding Wrapped Bitcoin as Collateral After BA Labs’ Recommendation
Ruholamin Haqshanas is a contributing crypto writer for CryptoNews. He is a crypto and finance journalist with over four years of experience. Ruholamin has been featured in several high-profile crypto...
Decentralized finance pioneer Sky, previously known as Maker, is revisiting its decision to offboard Wrapped Bitcoin (WBTC) as collateral in its lending protocol.
The reconsideration comes after a new recommendation from its key adviser, BA Labs, following discussions on the Sky governance forum.
On September 24, BA Labs advised halting the WBTC offboarding process.
The recommendation followed an extensive conversation with BitGo co-founder Mike Belshe, who addressed the community’s concerns regarding changes in WBTC’s management and custody.
Belshe clarified BitGo’s commitments, including the control of signing keys and a pledge to provide a minimum of 60 days’ notice before any significant changes.
The 60-day notification standard, according to Belshe, was created by BitGo to ensure transparency and has been consistently adhered to.
He highlighted that these practices aim to maintain the trust and security of WBTC as a decentralized financial instrument.
In light of BitGo’s assurances, BA Labs expressed a more favorable stance toward retaining WBTC as collateral.
BA Labs team member and DAO delegate, known by the pseudonym “monet-supply,” stated that with the current commitments from BitGo and a decrease in WBTC’s exposure to $170 million in total borrowing, the collateral risk has reached a more manageable level.
“While we continue to have concerns about BitGlobal serving as a signer for WBTC, we find it is no longer at a level requiring immediate collateral offboarding,” Monet-supply added.
“Therefore, we recommend indefinitely
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