wBTC now has connections to Justin Sun who has allegedly made sketchy financial decisions in the past exposing his clients to unnecessary risk. I believe even before Sun got involved BitGo’s liabilities against their BTC holdings was much larger than anyone expected. Years ago I noticed there was a price differential between wBTC and BTC. I tried applying to them for the ability to redeem, and they never bothered responding to me. They also stopped SBF from redeeming his wBTC. I don’t believe they were doing it for some moral reason like they had claimed.
The competitors to wBTC, tBTC and cBTC do allow redemption. Cardano is also having their Bitcoin_OS coming out in the near future, which also allows redemptions. So, the entire industry is moving away from wBTC for more trustworthy methods of collateralization that can be redeemed for the underlying asset. There’s even iBTC out there. But, they have some internal problems they need to fix around making their business profitable.
Coinbase and Maker have already delisted wBTC for competitors. Hydration is in the process of delisting. Coinbase and Maker are fairly self explanatory. Hydration is most likely going to be the major DeX in the Polkadot ecosystem, and they easily have a few hundred million to a billion votes for continuing to reduce exposure to wBTC. Currently, they’ve just stopped rewards for providing liquidity in the wBTC / iBTC pair. It also looks like there’s a faction within AAVE that wants to offboard wBTC.
I suggest we consider the process of offboarding by reducing the collateral factor of wBTC, and increasing the collateral factors for the competitors.