LlamaRisk, the risk service provider for Aave, has suggested reducing the loan-to-value (LTV) ratio of BitGo's Wrapped Bitcoin (WBTC) to zero on the DeFi lending platform. This proposal comes as concerns arise over BitGo's custodial transition for WBTC, particularly regarding transparency issues surrounding its partnership with Justin Sun. However, the Aave community, including Marc Zeller of the Aave Chan Initiative (ACI), is opposed to this move. Zeller argues for the inclusion of alternative Bitcoin products to diversify the platform and reduce reliance on WBTC, while still protecting current WBTC users. Sky, formerly MakerDAO, has also approved a proposal to halt new borrowing against BitGo's WBTC. WBTC remains the dominant tokenized version of Bitcoin, despite some DeFi players moving away from it.



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