Sky DeFi Platform to Divest Wrapped Bitcoin Exposure Amid Ownership Concerns
Sky, formerly known as Maker, is divesting its wrapped Bitcoin following a community governance vote that was finalized on September 19. The proposal that went on to gain a majority Yes of 88.17% support aims at removing WBTC exposure from the platform.
In total, the three-day vote saw 95,826 MKR tokens pledged in support of the proposal. Interestingly, while no votes were cast against the move, 11.83% of participants abstained. It must be noted that only 13 MKR whales voted in this key decision-making process.
The gradual sale of WBTC by Sky will take place from October 3 to November 28. Currently, WBTC-backed collateralized debts totalling $61.38 million are managed through SparkLend - a decentralized non-custodial liquidity protocol operated by Sky.
Recent changes to WBTC's ownership and control structure appeared to have motivated this development. In August, BA Labs, an advisor to Sky, flagged some reasons against WBTC.
Their red flags were sourced from BitGo, the custodian holding Bitcoin backing WBTC, partnering with BitGlobal-affiliated company. This was in light of such an August-announced partnership amid concerns cited around the potential for counterparty risks given past experience with Sun-affiliated products.
It is not alone in its concern. Aave, another big player in the DeFi ecosystem, similarly plans to reduce exposure to WBTC. A comment request posted on Aave's governance forum on September 18 echoed similar concerns about BitGo partnering with BIT Global and what that means to WBTC transparency and user assurance.
As platforms reconsider their relationship with WBTC, Sky is pursuing other wrapped Bitcoin variants for use as collateral, such as Coinbase's cbBTC and Threshold's tBTC.
