Last month, BitGo, the centralized custodian behind WBTC (Wrapped Bitcoin), announced a joint venture with Bit Global, a Hong Kong-based company led by Justin Sun, to manage the WBTC business.
Despite Sun’s claims that his involvement is purely strategic and that he will not control the WBTC reserve private keys or access any BTC reserves, the announcement triggered significant community backlash. Concerns about WBTC’s control and security have been raised.
Why the Community is Rallying to Save WBTC
As a leading wrapped Bitcoin token, WBTC remains the largest in its category, with over 150,000 WBTC currently in circulation. Kyber Network co-founder Loi Luu attributes WBTC’s success to its community-centered approach, straightforward technical design, clear trust mechanism, and first-mover advantage.
The WBTC process is relatively simple: users exchange BTC for WBTC through a custodian or redeem it back. This highlights the crucial role of custodians, with BitGo being the sole custodian for WBTC. Under BitGo’s stewardship, WBTC has thus far avoided any trust issues.
However, the announcement of BitGo’s partnership with Bit Global, which is influenced by Justin Sun, has raised concerns among the community about the potential misuse of collateral and the impact on WBTC’s security.
BitGo CEO Mike Belshe has downplayed Sun’s involvement, emphasizing the company’s security commitments. Sun himself has stated on Twitter that he will not control the WBTC reserve private keys or move any BTC reserves.
Despite these assurances, the community remains skeptical. Recently, a Twitter campaign called #SaveWBTC, initiated by the account @wbtcparty, has gained traction. The campaign has received support from projects such as Curve, Synthetix, and others, and it has also launched a signature campaign on Galxe with a $6,000 prize pool to incentivize participation.
Community Proposal: Merging tWBTC with WBTC
The debate has moved beyond Twitter, with the community proposing a merger of WBTC with tBTC, a product of Threshold Network (formed from the merger of Keep Network and NuCypher).
tBTC is a decentralized Bitcoin bridge that replaces centralized intermediaries with randomly selected operators using Threshold’s encryption technology. Currently, tBTC has over 3,600 tokens in circulation.
The proposal suggests combining WBTC’s user base, integrations, liquidity, and brand recognition with tBTC’s decentralized custody and permissionless bridging. This could align with BitGo’s multi-jurisdictional and multi-institutional custody goals while ensuring collateral security and stability.
This proposal has garnered significant attention and discussion.
Conclusion
In the crypto industry, there are generally two approaches to integrating Bitcoin: building within the ecosystem (such as BTC’s L2 solutions and re-staking) or wrapping it for use within Ethereum’s ERC20 standard. The former is slowly developing, while the latter has had mixed success over the years. It remains to be seen whether the community will formally submit the proposal for discussion, but the debate on how to effectively decentralize wrapped Bitcoin continues.
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