Sky (formerly MakerDAO) may be ready to suspend its original plan to strip WBTC as collateral following the latest advice from its advisor BA Labs. The decision stems from a lengthy discussion on the Sky discussion forum with BitGo CEO Mike Belshe. BitGo was the only custodian of Bitcoin supporting WBTC until it reached a strategic partnership with Justin Sun in August to transfer custody rights to the latter.
BA Labs, Sky's advisor, expressed concerns about Justin Sun's involvement in the project, especially considering that about $200 million in loans on the platform are somehow related to WBTC collateral. As a result, Sky community members voted last week to approve a five-step plan to remove WBTC from collateral starting in early October. But discussions on the matter have not stopped since the vote.
Belshe posted a large number of posts on the forum to clarify that the new custody arrangement was misunderstood and Justin Sun did not have the ability to unilaterally change the existing structure. He emphasized that Justin Sun would not "have the ability to direct changes in key management practices of BitGo or BitGo Singapore" because these two entities are responsible for overseeing the multi-signature keys that control the new custodian.
Subsequently, BA Labs issued a statement on Tuesday saying that after further understanding, "additional details and clarity have made us feel more comfortable about the current state of WBTC operations and key management." They pointed out that the WBTC exposure as collateral has dropped to about $170 million, reducing the risk to a "more acceptable range."
BA Labs said: "While we are still concerned about BitGlobal's role as a WBTC signer, we find that it is no longer at a level that requires immediate exclusion from collateral, so we recommend that the collateral removal process be suspended indefinitely." (CoinDesk)
On September 20, Sky passed a proposal to divest $200 million of WBTC collateral asset exposure, which is divided into five stages. The first step will be implemented on October 3 and the last stage will end on November 28.
Alex
