MakerDAO, the decentralized autonomous group behind the DeFi protocol Maker, has authorized a proposal to halt new borrowing for BitGo’s wrapped Bitcoin (WBTC).

On August 15, MakerDAO introduced that it might be reducing the debt ceiling for all WBTC vaults to zero, successfully blocking new borrowing from these vaults and lowering the loan-to-value ratio (LTV) for WBTC on SparkLend to 0%.

Outlining the adjustments, the Protocol said:

“WBTC-A, WBTC-B, and WBTC-C have been faraway from the Debt Ceiling Immediate Entry Module (DC-IAM). The debt ceiling for WBTC-A, WBTC-B, and WBTC-C is now set at 0 DAI.”

MakerDAO clarified that these adjustments don’t have an effect on the Maker Protocol's core WBTC vault or present borrowing positions inside SparkLend.

In response to information from Etherscan, two of Maker's good contracts are among the many high 10 holdings of WBTC, with over 6,600 WBTC tokens valued at practically $380 million.

Why MakerDAO eliminated WBTC

MakerDAO’s resolution to take away WBTC is available in response to current neighborhood considerations over Tron founder Justin Solar’s involvement with the digital asset.

Final week, BitGo, the developer and custodian of WBTC, introduced a partnership with Solar and BiT International to handle custody of WBTC, shifting custody from the US to a number of jurisdictions together with Hong Kong and Singapore.

Following the information, a number of cryptocurrency gamers, together with MakerDAO contributors, expressed considerations in regards to the safety of the token and Solar’s involvement within the undertaking.

Nevertheless, BitGo CEO Mike Belshe pressured that Solar has no affect over the tokens and guaranteed that the crypto entrepreneur doesn’t have entry to the custodian's asset keys.

Over $30 million in WBTC burned

Nevertheless, these assurances don’t seem to have had any influence on cryptocurrency investor confidence.

On-chain information exhibits that crypto buyers are lowering their publicity to WBTC by burning and redeeming belongings. The dashboard exhibits that roughly 575 WBTC, or greater than $30 million value, has been burned up to now seven days, with crypto exchanges Crypto.com and Galaxy Digital main the way in which.

In the meantime, WBTC's rival tBTC can also be seeing a rise in holders: In response to the Dune Analytics dashboard, tBTC holders surpassed 1,000 final week, and as of press time the whole provide stands at 3,107.36 tBTC, equal to over $180 million.

Moreover, Coinbase has hinted that it’ll quickly launch its personal wrapped Bitcoin product.

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