The limit of the DeFi protocol is to ‘save WBTC’ by offering a Bitcoin package integration
The Bitcoin (BTC) decentralized finance (DeFi) protocol is proposing to merge its own BTC “wrapper” token, tBTC, into Wrapped Bitcoin (WBTC), following concerns about a potential shift in celebrity control. BTC package, according to a proposal on August 29th on Threshold's management forum.
In the year On August 9, BitGo – the custodian that supports Bitcoin support WBTC – announced a planned partnership with BiT Global, a Hong Kong-based crypto exchange. In a partnership that plans to expand WBTC's US-based footprint, BitGlobal is expected to partially control the multi-signature wallet that hosts WBTC's Bitcoin support.
“This announcement has proven controversial due to Justin Sun's involvement, with many in the ecosystem showing ‘concerning signs that the associated projects are being misused as collateral,'” Threshold's proposal said.
Limit these fears with a “warm exchange [WBTC’s] Centralized protection and merchant-based mint and burn model with Threshold's decentralized protection and permissionless minting/redemption mechanism.
With a market capitalization of nearly $9 billion according to CoinMarketCap, WBTC is the most popular Bitcoin package. Bitcoin wrappers are ERC-20 tokens backed by BTC.
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Source: BitGo
The proposal aims to solve this by transferring control of WBTC to Threshold, and WBTC is supposed to benefit from a “decentralized protection and permissionless bridging mechanism” from a decentralized autonomous organization (DAO).
Under the plan, Threshold will grant trading (mint/redemption) privileges to WBTC and other traders [would be] Removed. WBTC DAO Privileges (e.g. Freeze Function, etc.) [would be] Transferred to Threshold DAO,” the proposal said.
According to the proposal, the TBC wrapper would effectively remove its own BTC wrapper, tBTC, by saying that “disabled and existing supply of TBTC is 1:1 redeemable for WBTC (and remains redeemable for native BTC).”
In the year In a post on the MakerDAO forum on August 11, risk management firm Block Analytica Labs (BA Labs) proposed to close all new wBTC liabilities and prevent new loans on wBTC securities in the upcoming executive vote.
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