MakerDAO Halts New WBTC-Backed Loans Amid BitGo Concerns

MakerDAO participants can hold wrapped bitcoin (or (main)

+0.092%
), the collateral was approved.

MakerDAO governance has approved an executive vote to lower the WBTC debt ceiling to zero. die

+0.065%
— Prohibits new loans collateralized with WBTC collateral. Also, the loan-to-value ratio (LTV) of WBTC is set to 0%. In particular, MakerDAO allows users to mint DAI stablecoin as over-collateralized loans.

This adjustment will not affect existing loans supported by WBTC, as the liquidation threshold will not change.

The risk parameter adjustment for WBTC comes after Bitgo, the developer and custodian of WBTC, announced a partnership with BiT Global (linked to Tron founder Justin Sun) to manage WBTC custody, shifting custody from the US to multiple jurisdictions including Hong Kong and Singapore.

This development, influenced by Sun’s controversial reputation and potential centralization of control, raised security concerns among MakerDAO contributors, resulting in the change. In his defense, BitGo CEO Mike Belshe emphasized the company’s commitment to security and the legal oversight of BitGo and BiT Global.

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