As a typical representative of bringing BTC into the Ethereum ecosystem, WBTC is still the BTC wrapped token with the largest market value. Data shows that its total circulation has now exceeded 150,000.
Written by: 1912212.eth, Foresight News
Last month, BitGo, the centralized acceptor behind WBTC, the largest wrapped Bitcoin by market value, announced the establishment of a joint venture with Hong Kong-based Bit Global to take over the WBTC business. Behind Bit Global is Justin Sun.
Although, Justin Sun later responded that his participation in WBTC was purely strategic, and that he would not control the private keys of WBTC reserves, nor could he move any BTC reserves. The minting process was completely managed by custodians Bitglobal and BitGo, following the same procedures as before. But the community was obviously not convinced, and the news caused widespread dissatisfaction in the community, with some expressing concerns about their control over WBTC and security.
Why did the community initiate save WBTC?
As a typical representative of bringing BTC into the Ethereum ecosystem, WBTC is still the largest BTC wrapped token by market value. Data shows that the total circulation of WBTC has exceeded 150,000. Loi Luu, co-founder of Kyber Network, attributed WBTC’s success to the community-centric approach, easy-to-understand technical design, clear trust mechanism, and first-mover advantage.
The method adopted by WBTC is relatively simple. Users can exchange BTC for WBTC through the acceptor, and can also redeem it through the acceptor. In this process, the importance and status of the acceptor are self-evident. At present, the only acceptor of WBTC is BitGo.
During the period when BitGo served as the acceptor, WBTC has withstood the test, and no trust crisis has occurred so far.
Acceptance under a centralized mechanism is a great test of the credibility of the institution. Whether it is reliable or not is a question that most people are very concerned about.
The problem came when BitGo announced a joint venture with Bit Global, which is controlled by Justin Sun. The community was concerned that it might misappropriate collateral and believed that this would reduce the security of WBTC.
BitGo CEO Mike Belshe emphasized the company's security commitment and downplayed Justin Sun's involvement. Even Justin Sun himself responded on Twitter that he would not control the private keys of WBTC reserves and could not move any BTC reserves.
The community still isn’t buying it.
Recently, a Twitter account @wbtcparty started the saveWBTC campaign to express dissatisfaction. The Twitter community immediately began to spread related tweets, and even the official Twitter accounts of Curve, Synthetix, Wormhole Ecosystem, Mezo, Enzyme and other projects retweeted to support the campaign.
In addition, the event also launched a signature campaign on Galxe, with a total bonus of US$6,000 provided by the initiator and the community. As long as users who meet the requirements sign and participate in the event, they will receive OAT and bonuses after the event ends.
Because saveWBTC has received responses from some well-known project parties and with the incentive of event bonuses, as of the time of writing, related event tweets are still emerging.
In response to this, BitGo CEO responded again at the recent Korean Blockchain Conference that the cooperation with Bit Global aims to eliminate the risk of single point failure and expand business in Asia. He admitted that Justin Sun is a controversial figure, "Most companies won't even mention his name, but we did it because transparency is important."
Community Proposal: tWBTC merges with WBTC?
Save WBTC did not just remain a Twitter spat, and the community quickly proposed a solution, which was to merge WBTC with Threshold’s tBTC.
Some readers may not be familiar with the background of the project. Threshold Network is a new project that was later merged from Keep Network and NuCypher. tBTC was first launched by Keep as a permissionless and decentralized Bitcoin bridge. tBTC replaces centralized intermediaries with a randomly selected group of operators who run nodes on the network. These operators jointly use Threshold encryption technology to protect the Bitcoin deposited by users. According to the data website, the current circulation of tBTC exceeds 3,600.
The proposal suggests that combining WBTC’s user base, integration, liquidity, and brand awareness with tBTC’s decentralized custody and permissionless bridge mechanism can better achieve BitGo’s multi-jurisdictional and multi-institutional custody goals while ensuring the security and stability of collateral.
The proposal has received considerable views and has been hotly debated.
summary
At present, there are two common ways for the crypto industry to play with BTC. One is to build roads and bridges on its own ecosystem to create a prosperous city, such as BTC's L2 and re-staking, and the other is to package it and put it into the Ethereum ecosystem under the ERC20 standard. The former is still under construction at a leisurely pace, and the latter has not been successful in the past years of attempts, but has also achieved some small gains. It is not yet known whether the proposal will eventually be submitted to the community for discussion, but the issue of how to decentralize the packaged Bitcoin may continue to be discussed.
