Sky (formerly MakerDAO) votes on new WBTC fee schedule

Sky Protocol, formerly MakerDAO, will change the fee schedule for Wrapped Bitcoin (WBTC). Previously, the Sky community voted on a gradual divestment of WBTC in several stages, starting from October 8. 

Sky completed a community vote on the handling of remaining Wrapped Bitcoin (WBTC) vaults. The protocol will increase stability fees, but for now retain the asset and its vaults, waiting to phase it out by attrition or by the individual decision of users.

The shift in stability fees followed a community vote and approval before the decision came into force. As of October 7, WBTC stability fees increased based on their corresponding vault in the protocol. 

Sky will now require stability fees of 9.25% for WBTC-A, 9.75% for WBTC-B, and 9% for WBTC-C vaults. The three vaults also had their liquidation parameters updated to reflect the increased perceived risk. Additionally, all three vaults will have their liquidation penalty reduced to zero. 

The proposal passed another decision on the vaults – to increase the WBTC liquidation ratio from 145% to 150%, and for WBTC-B from 130% to 150% over six days. The liquidation ratio also allows for bigger DAI loans based on the same collateral. 

Sky’s proposal came into force just a day before WBTC changed its holding structure. From October 8 onward, WBTC will be minted on the TRON blockchain, though Justin Sun will not have access to the underlying BTC collateral, which remains transparent and secure. BitGlobal once again reassured the markets it would not be able to access the collaterals or have sufficient access to the multi-sig wallet.

Sky Ecosystem softens stance on WBTC

Sky Ecosystem at first aimed for a quick divestment of WBTC, due to doubts that BitGlobal would grant unsafe access to WBTC multisig wallets. It turns out that WBTC cannot hand over such access, and no entity would be able to control the minting or the reserves without the involvement of BitGo. 

BitGo will also share transparent data with all WBTC users and holders of changes in ownership and wallet signature structure, with a 60-day notice. The most contentious issue with WBTC was its launch on the TRON blockchain. The asset will also work as a native token on the Kava blockchain, in the bid to move to multiple networks. 

As of October 7, the supply of WBTC is at 152,886, though only accounting for Ethereum-based tokens existing at this point. WBTC has a transparency page to list on-chain assets, unlike cbBTC, which relies on Coinbase’s financial reporting. 

As a result of the recent disclosures, the Sky Ecosystem decreased its WBTC vaults to around $170M and decided to stop the process of immediate offboarding. The Sky Ecosystem community is also assured about the safety and transparency of cbBTC, the asset that may replace WBTC. Coinbase’s wrapped coin was at first proposed as compensation to all WBTC vault holders. 

SKY tokens go through price discovery

MakerDAO renewed its investment structure and even blocked US-based investors from some of its services. The new tokens are still in the process of upgrading MKR and DAI into SKY and USDS. 

SKY is making its debut as a new token, still establishing its supply. In the past week, SKY regained its Kraken and KuCoin listing, while MKR has residual trading. 

SKY tokens sank to around $0.05, with a self-reported supply of more than 22B tokens. The new asset moves away from Maker’s high-priced approach. SKY will have a different role in the ecosystem and will be used as a governance token, but vaults will use USDS and other assets. 

USDS will have a total circulation above 5.11B, though a little over 1B has been upgraded from DAI. The old stablecoin was still in residual circulation as of October 8. For the past week, USDS has been available as a vault asset on Aave V3, and users can also borrow USDS for trading. USDS is still bound to Uniswap V2 for most of its trading activity.

Sky Protocol has shifted to Professional Securities Market and RWA reserves, in addition to retaining some crypto collaterals. The ecosystem is also accruing staked USDS, or sUSDS into dedicated vaults for farming passive income. The protocol reports more than $12.7B in value locked, offering up to 6.5% annualized for SKY token staking. 

Cryptopolitan reporting by Hristina Vasileva