MakerDAO, the decentralized autonomous group behind the DeFi Maker protocol, has authorized a proposal to cease new borrowings towards Bitcoin (WBTC) wrapped in BitGo.
On August 15, MakerDAO revealed that it’s decreasing the debt ceiling for all WBTC vaults to zero. This transfer successfully prevents any new lending from these vaults and reduces the loan-to-value (LTV) ratio of WBTC on SparkLend to 0%.
The protocol outlined the modifications and said:
“WBTC-A, WBTC-B and WBTC-C have been faraway from the Debt Ceiling Speedy Entry Module (DC-IAM). Debt caps for WBTC-A, WBTC-B and WBTC-C are actually set to 0 DAI.”
MakerDAO has clarified that these modifications won’t have an effect on present lending positions in the important thing WBTC vaults Maker Protocol and SparkLend.
Etherscan information exhibits that Maker's two good contracts are among the many prime ten WBTC holders with over 6,600 WBTC tokens price almost $380 million.
Why MakerDAO eliminated WBTC
MakerDAO's choice to take away WBTC follows latest group issues about Tron founder Justin Solar's involvement with the digital asset.
Final week, BitGo, the developer and custodian of WBTC, introduced a partnership involving Solar and BiT International to handle WBTC escrow. The association shifted custody from the USA to a number of jurisdictions, together with Hong Kong and Singapore.
Following the information, a number of crypto stakeholders, together with MakerDAO contributors, expressed issues about token safety and Solar's involvement within the challenge.
Nevertheless, BitGo CEO Mike Belshe emphasised that Solar has no affect over the tokens and warranted that the crypto entrepreneur didn’t have entry to the cryptocurrency supervisor's asset keys.
WBTC has burned over $30 million
Nevertheless, these assurances appear to have had no affect on investor confidence in cryptocurrencies.
On-chain information exhibits that cryptocurrency buyers have been lowering their publicity to WBTC by burning and cashing out their belongings. In accordance with its dashboard, roughly 575 WBTC price over $30 million have been burned prior to now seven days, led by crypto alternate Crypto.com and Galaxy Digital.
In the meantime, WBTC's rivals similar to tBTC have seen their numbers improve. In accordance with the Dune Analytics dashboard, tBTC holders surpassed 1,000 final week, whereas their complete provide at press time was 3,107.36 tBTC, equal to greater than $180 million.
As well as, Coinbase has indicated that it’ll quickly launch its personal packaged Bitcoin product.
