The original community proposed a merger to protect WBTC
Threshold Community proposes to merge tBTC with WBTC. The proposal is based on the threat to the stability of WBTC due to Justin Sun's involvement. According to the opinion, BitGo will receive T tokens, it will be the main stakeholder in the Threshold Network.
In a strategic move to protect the future of Wrapped Bitcoin (WBTC), a proposal titled “#saveWBTC – Merge with Threshold's tBTC” has been proposed to merge Threshold's decentralized tBTC with BitGo's WBTC.
The proposal, which is currently being discussed on Threshold's Forum page, is a response to concerns raised in the crypto community about the stability of WBTC by BitGo partnering with Hong Kong-based Bit Global, a company partly owned by Tron ecosystem founder Justin Sun.
Justin Sun on his tumult with WBTC.
The partnership has raised alarms because of Sun's controversial history, misappropriation of past securities. This discomfort has led major DeFi protocols such as MakerDAO to limit their exposure to WBTC, stop using collateral, and consider phasing out the asset altogether.
Ave, another significant player in the DeFi space, is closely monitoring the situation.
Threshold, WBTC merger proposal
The merger proposal seeks to replace WBTC's centralized custody and merchant-based mint-and-burn model with a decentralized, permissionless minting system. This transition aims to ensure the security and stability of the security, verifying users and protocols that depend on WBTC.
The plan involves disabling tBTC minting and granting WBTC trading privileges to Threshold's DAO, allowing existing tBTC holders to return WBTC at a 1:1 ratio.
As part of the proposal, BitGo will receive an offering of T tokens, making it the largest shareholder in the Threshold Network.
The merger will be implemented in stages to ensure a seamless transition, with plans to safely exit WBTC if the proposal is rejected.
By combining WBTC's established user base and liquidity with tBTC's decentralized technology, Threshold aims to secure WBTC's role in the DeFi ecosystem, preventing concerns of BiT Global's participation from distorting the broader market.
