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News

Sky WBTC Removal Is Now Being Promoted Before Sep 26

September 14, 2024 - Around 2 mins mins to read

Key Points:

  • Sky will begin removing WBTC from its SparkLend platform, with the process starting on September 26 through executive votes.
  • WBTC users are advised to close their positions in traditional vaults and SparkLend to avoid liquidation.
  • The Sky WBTC removal follows concerns over TRON founder Justin Sun’s involvement.
Sky (formerly MakerDAO) has released its second notice for the removal of Wrapped Bitcoin from its lending protocol, SparkLend.
Sky WBTC Removal Is Now Being Promoted Before Sep 26

Read more: Select Sky WBTC Exposure Slowly Diminishing With New Governance Proposal

Sky to Remove WBTC from SparkLend Platform

Additionally, the Sky WBTC removal will ultimately remove the WBTC-A, WBTC-B, and WBTC-C vaults and is a part of larger risk mitigation.

The redemption process, according to Block Analitica, and led by the DeFi risk management company BA Labs, will start with an executive vote scheduled for September 26.

The users of WBTC in the legacy vaults and SparkLend have been called upon for immediate action by closing their positions to avoid liquidation. This could possibly impact the US$200 million loans registered within the Sky ecosystem. Sky strongly encouraged users to close old vault positions as the process unfolds in order to limit exposure to undesired risk.

Wrapped Bitcoin is a popular token representing Bitcoin on other blockchains. It holds the market cap of nearly $9 billion and is relatively quite crucial in DeFi, more particularly for loan collateral.

Change in Custody Raises Red Flags on TRON’s Involvement

The impending Sky WBTC removal has drawn attention from industry analysts and blockchain experts alike, given Sky’s prominence in the DeFi space. Sky is also behind the issuance of the decentralized stablecoin DAI, which has a market cap of $5 billion.

Sky WBTC removal plan comes after a major switch in WBTC custody. Early in January, BitGo-a, a crypto custody firm behind, revealed plans to transition control of the asset to a joint operation that included a new custody platform called BiT Global. It was supposed to decentralize the project’s control across three entities, but there were questions surrounding the involvement of the TRON founder Justin Sun.

DISCLAIMER: The information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

MakerDAO

sky

Sky WBTC Removal

SparkLend

WBTC

Wrapped Bitcoin

Author

Harold

With a passion for untangling the complexities of the financial world, I've spent over four years in financial journalism, covering everything from traditional equities to the cutting edge of venture capital. "The financial markets are a fascinating puzzle," I often say, "and I love helping people make sense of them." That's what drives me to bring clear and insightful financial journalism to the readers of Coincu.