As a typical representative of bringing BTC into the Ethereum ecosystem, WBTC is still the largest market value BTC-pegged token, with data showing that its total circulation has now exceeded 150,000.
By 1912212.eth, Foresight News
Last month, BitGo, the centralized custodian behind the largest market value wrapped Bitcoin (WBTC), announced the establishment of a joint venture with Bit Global in Hong Kong to take over the WBTC business. Bit Global is backed by Justin Sun.
Although Justin Sun later responded that his involvement in WBTC is purely strategic and he will not control the private keys of WBTC reserves, nor will he be able to move any BTC reserves. The minting process is entirely managed by the custodian institutions Bitglobal and BitGo, following the same procedures as before. However, the community clearly does not buy this explanation. The news sparked widespread dissatisfaction in the community, with some expressing concerns about its control over WBTC and its security.
Why is the community launching a "save WBTC" movement?
As a typical representative of bringing BTC into the Ethereum ecosystem, WBTC is still the largest market value BTC-pegged token, with data showing that its WBTC total circulation has now exceeded 150,000. Loi Luu, co-founder of Kyber Network, believes that the success of WBTC is attributed to its community-centric approach, simple and understandable technical design, clear trust mechanism, and first-mover advantage.
The method adopted by WBTC is relatively simple. Users can exchange BTC for WBTC through custodians, and can also redeem it through custodians. In this process, the importance and status of custodians are self-evident. Currently, the only custodian of WBTC is BitGo.
During BitGo's tenure as the custodian, WBTC has undoubtedly withstood the test and has not experienced any trust crisis so far.
Under the centralized mechanism of custody, the credibility of institutions is put to the test. Whether they are reliable or not is a matter of great concern to most people.
The problem lies in BitGo's announcement of the establishment of a joint venture with Bit Global, which is controlled by Justin Sun. The community is concerned that this may lead to the misappropriation of collateral and lower the security of WBTC.
BitGo CEO Mike Belshe emphasized the company's security commitment, downplaying Justin Sun's involvement. Even Justin Sun himself responded on Twitter, stating that he will not control the private keys of WBTC reserves, nor will he be able to move any BTC reserves.
The community remains unconvinced.
Recently, a "saveWBTC" movement was initiated by the Twitter account @wbtcparty to express dissatisfaction. The Twitter community immediately began to spread related tweets, and even several project parties such as Curve, Synthetix, Wormhole Ecology, Mezo, and Enzyme have retweeted to support this activity.
In addition, the campaign also launched a signature campaign on Galxe, with a total of $6,000 in rewards provided by the initiator and the community. As long as users meet the requirements and participate in the activity by signing, they will receive OAT and rewards after the end of the activity.
With the support of some well-known project parties and the incentive of activity rewards, as of the time of writing, there are still continuous tweets related to the activity.
In response to this, BitGo CEO once again stated at a recent blockchain conference in South Korea that the cooperation with Bit Global aims to eliminate single point of failure risks and expand business in Asia. He admitted that Justin Sun is a controversial figure, "most companies wouldn't even mention his name, but we did, because transparency is important."
Community proposal: Merge tWBTC with WBTC?
The "Save WBTC" movement did not just stop at the controversy on Twitter. The community quickly proposed a solution, which is to merge WBTC with Threshold's tBTC.
Some readers may not be familiar with the project background. Threshold Network is a new project that emerged from the merger of Keep Network and NuCypher. tBTC was originally launched by Keep and is a permissionless and decentralized Bitcoin bridge. tBTC replaces centralized intermediaries with a randomly selected set of operators running nodes on the network, and these operators collectively use Threshold encryption technology to protect the Bitcoin deposited by users. Data shows that the current circulation of tBTC exceeds 3,600.
The proposal suggests that combining WBTC's user base, integration, liquidity, and brand awareness with tBTC's decentralized custody and permissionless bridging mechanism can better achieve BitGo's goal of multi-jurisdictional and multi-institutional custody. At the same time, it can also ensure the security and stability of the collateral.
The proposal has received considerable attention and sparked heated discussions.
Conclusion
Currently, there are generally two ways in the crypto industry to leverage BTC. One is to build a prosperous ecosystem on its own, such as BTC's L2 and re-staking, while the other is to package it and put it into the Ethereum ecosystem under the ERC20 standard. The former method is still under slow construction, while the latter, although not fully successful in the past few years of attempts, has also made some progress. It is not yet known whether this proposal will ultimately be submitted for community discussion, but the topic of how to decentralize wrapped Bitcoin is likely to continue to be discussed.
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