- BitGo has adjusted its WBTC custody operations in response to security concerns.
- The founder of Jupiter Exchange, known as Meow, views these changes positively.
- BitGo has modified its custody model to address feedback from the community.
Learn about BitGo’s latest adjustments in WBTC custody operations, mitigating risks, and gaining approval from industry players like Jupiter Exchange’s founder.
BitGo’s Revised WBTC Custody Model: An Overview
BitGo has introduced a revamped custody model for its Wrapped Bitcoin (WBTC) operations, aiming to address significant risk concerns. This model change follows a series of feedback sessions held on platforms like X Spaces. In the new arrangement, BitGo plans to distribute the custody of keys across multiple jurisdictions to enhance security.
Community Response and Approval
Meow, the founder of the Solana-based Jupiter Exchange, has expressed approval of these updates, marking them as a satisfactory solution to earlier concerns. Specifically, Meow highlighted the relocation of the backup key to Bitgo Singapore, a move that he believes mitigates major contentions and aligns better with the intended multi-jurisdictional framework.
Changes in Custody Control
Previously, the custody model provided Justin Sun’s firm greater operational control, granting access to the cold storage backup of collateral BTC for WBTC. Many users, including Meow, had raised concerns regarding this setup due to the considerable control vested in a single entity.
Revised Multi-Jurisdictional Setup
Under the new custody model, BitGo’s operations will span three locations: the USA, Hong Kong, and Singapore. Each institution involved—BitGo Inc., BitGo Singapore, and BiT Global—will hold one of the three master keys, thus ensuring a more balanced and secure multisig cold storage arrangement. This decentralization of control is intended to bolster the security of the collateral assets.
Impact on the Wrapped Bitcoin (WBTC) Ecosystem
The revisions in BitGo’s custody approach are timely, especially as the market for wrapped Bitcoin products is growing. Companies like Coinbase are introducing their wrapped Bitcoin products, such as cbBTC. Arthur Cheong, founder of DeFiance Capital, predicts an influx of wrapped BTC products in the next 6-12 months, potentially contributing around $20 billion in total value locked (TVL) to the decentralized finance (DeFi) ecosystem.
Conclusion
BitGo’s recent adjustments to its WBTC custody model demonstrate the company’s commitment to addressing community concerns while enhancing the security and operational integrity of its services. As the market for wrapped Bitcoin continues to expand, these changes are poised to set a new standard in the industry, contributing to the growth and security of the DeFi ecosystem.
