MakerDAO Community Reduces WBTC Collateral Acceptance Factor

IconCryptoNewsTerminal Staff15 Aug, 2024

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MakerDAO Community Reduces WBTC Collateral Acceptance Factor

MakerDAO (MKR) recently announced a governance vote to reduce the collateral acceptance factor for WBTC, an Ethereum-based token pegged to the value of Bitcoin. The vote passed, and the change went into effect on April 20th. This change means that WBTC will no longer be accepted as collateral in MakerDAO Vaults and will not be available for borrowing on its decentralized lending platform, Spark Lend. The MakerDAO community began discussing the reduction of the collateral factor on April 14th, following concerns about centralization raised after the news that Tron founder Justin Sun had joined the WBTC project. Some community members were concerned that Sun's involvement could lead to WBTC becoming more centralized and less decentralized. This could have negative implications for MakerDAO, as WBTC is one of the largest collateral assets in its system. The vote to reduce the collateral factor was ultimately passed with a majority of the MKR tokens voting in favor. This shows that the MakerDAO community is committed to maintaining the decentralization of the system and is willing to take action to protect it.

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