MakerDAO, a prominent company in the decentralized finance (DeFi) space, is assessing the impact of the upcoming Wrapped Bitcoin (WBTC) custody change on its risk management framework.

Due to the recent announcement by BitGo, a major WBTC custodian, that they will transfer control of this product to a new joint venture with BiT Global, this governance-focused DAO has taken a rather cautious approach.

MakerDAO Warns of Risks Associated with Justin Sun's Role

MakerDAO is considering a number of measures to mitigate risks associated with changes in Wrapped Bitcoin custody. The review comes after BitGo, which currently oversees the product, provided an update on the transfer of control and areas of operation.

This change is partly due to the partnership with Justin Sun and the Tron ecosystem, which will give Sun a degree of control and influence over the new venture that will manage WBTC. Given Sun’s past involvement with other crypto projects, including TUSD and Huobi’s USDT reserves, which have had some issues with operations and transparency, the community has expressed concerns.

In light of these developments, the company is currently considering possible measures to mitigate risks to its platform and users. On-chain and off-chain governance practices reflect a fairly cautious approach to this process. At the same time, there is a proposal to significantly reduce the proportion of the company's reserves.

This could include setting a zero debt ceiling for different collateral integrations, such as WBTC-A, B, and C, until the future of the supervisory frameworks is better understood.

Additionally, there are proposals to stop borrowing products on SparkLend, another service related to the company, and reduce the LTV rate to 0%. These proposed actions highlight the company’s efforts in this regard, showing that risk management is an important aspect of DeFi. However, final decisions are expected to be made in a board vote next week.

BitGo Transfers WBTC Custody to Justin Sun

MakerDAO’s response follows BitGo’s recent announcement that it is transferring ownership of the product to a new joint venture with BiT Global. This strategic shift will include sharing custody across different jurisdictions, such as Hong Kong and Singapore, instead of just the United States as it currently does.

The transition is expected to be completed within the next 60 days, which will be a major change in WBTC's operating environment.

Following these changes, BitGo has received a Major Payment Institution License from the Monetary Authority of Singapore (MAS). This approval significantly expands BitGo’s regulated services in Asia and strengthens the company’s reputation as a trusted provider of digital asset management solutions amid its restructuring.

*WBTC is an ERC-20 token on the Ethereum blockchain backed 1:1 by Bitcoin (BTC). Each WBTC is backed by an equivalent amount of Bitcoin held in storage, so the value of WBTC is equivalent to Bitcoin.

WBTC aims to bring Bitcoin into the Ethereum ecosystem, allowing users to participate in decentralized finance (DeFi) applications without leaving the Ethereum network. It combines the liquidity and credibility of Bitcoin with the programmability and smart contract features of Ethereum.

Source: https://tapchibitcoin.io/makerdao-warning-rui-ro-lien-quan-den-justin-sun-toi-wbtc.html