Wrapped Bitcoin supplied on Aave hits record high despite backing fears 

Alex O’Donnell2 hours agoWrapped Bitcoin supplied on Aave hits record high despite backing fears WBTC is still the most popular Bitcoin wrapper, with nearly $10 billion in TVL, according to DefiLlama.593 Total views1 Total sharesListen to article 0:00NewsOwn this piece of crypto historyCollect this article as NFTCOINTELEGRAPH IN YOUR SOCIAL FEEDFollow ourSubscribe onWrapped Bitcoin (WBTC) supplied on decentralized lending platform Aave hit an all-time high despite anxieties around the Bitcoin (BTC) wrapper’s backing, according to data from Dune Analytics.

Aave’s WBTC supply on the Ethereum network broke 37,000 in September, or more than $2 billion at current prices, according to Dune.

The record-breaking total value locked (TVL) on Aave follows a wave of skepticism among cryptocurrency retail investors about the safety of the underlying spot Bitcoin backing WBTC.

On Aug. 9, BitGo — the cryptocurrency custodian holding WBTC’s Bitcoin backing —agreed to grant Hong Kong-based crypto exchange BiT Global partial control of the multisignature wallet that holds the custodied Bitcoin.WBTC on Aave. Source: Dune Analytics

Related:21.co Bitcoin wrapper to add Chainlink proof of reserve

“This announcement has proven controversial due to the involvement of Justin Sun, with many in the ecosystem expressing concern over his ‘affiliated projects show worrying signs of possible misappropriation’ of collateral,” Threshold, a rival Bitcoin wrapper, said in August. 

Sky, a decentralized finance (DeFi) protocol formerly known as Maker, opted to removeWBTC from its platform on Sept. 19.

Then, on Sept. 24, the DeFi protocol reconsidered its plan to offboard WBTC after receiving a new recommendation from key adviser BA Labs. 

BA Labs recommended pausing the offboarding plan following a lengthy conversation with BitGo co-founder Mike Belshe on Sky’s governance forum. 

Among other assurances, BitGo committed to providing at least 60 days of public written notice before any changes to entities controlling WBTC keys.

On Sept. 23, 21.co, the parent company of cryptocurrency asset manager 21Shares, announced plans to add Chainlink’s proof of reserve to 21BTC to address concerns related to the Bitcoin wrapper’s backing. 

Coinbase chief legal officer Paul Grewal responded to related concerns surrounding the user terms of service for Coinbase’s newly launched cbBTC Wrapped Bitcoin product. He confirmed that Coinbase would reimburse clients in the event the exchange loses the underlying Bitcoin. 

According to DeFiLlama, WBTC is still the most popular Bitcoin wrapper, with upwards of $9 billion in TVL. 

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