Hey Edge readers,

This week has been buzzing with news surrounding WBTC and its newly announced partnership with BiT Global. We’re taking a closer look at what this means for WBTC and why we’ve decided to proactively downgrade the asset.

In today’s edition:

• WBTC downgraded from Best to Good

  We break down the reasons behind the downgrade and what it means for our BTC pools.

• Co-founder Mehdi discusses this week’s events 🗞️

  Get the latest on BitGo’s partnership with Justin Sun, Coinbase launching cbBTC, and more.

Stay sharp. 🫡

-The Exponential team

WBTC downgraded from Best to Good

In light of recent developments around BitGo’s announcement of a strategic partnership with BiT Global, we are taking a proactive step to downgrade the asset rating of WBTC (Wrapped Bitcoin) from Best to Good within our risk framework.

What’s changing?

BitGo’s new plan for WBTC custody involves expanding from a single jurisdiction (United States) to three jurisdictions—United States, Hong Kong, and Singapore. While this partnership might appear beneficial, it also involves handing over 1 of 3 private keys to BiT Global, a lesser-known custody platform based in Hong Kong.

Under the new model, WBTC’s treasury will be managed through a 2-of-3 multisig arrangement, with BitGo Inc., BiT Global, and BitGo Singapore Ltd., each controlling one key. This shift increases WBTC’s risk profile as it now relies on two centralized entities—BitGo and BiT Global—raising concerns about the transparency and decentralization of WBTC’s custodial management.

The involvement of multiple jurisdictions also introduces additional legal and regulatory risks. With keys now distributed across three countries, the potential exposure to less transparent regulatory frameworks adds another layer of risk.

No impact on BTC pool ratings

Despite the downgrade in WBTC’s asset rating to Good, there is no impact on the ratings of our BTC pools that feature WBTC at this time.

We are closely monitoring this situation and will provide updates as necessary to ensure our users remain informed about any changes in the WBTC risk rating.

New pool launches

For BTC yield farmers, now’s a great time to explore new alternatives…

For our ETH and Stable maxis, we also have new Low Risk pools to quench your thirst for yield.

In the news

• Record drop in Ethereum gas fees is bullish - Read

• PayPal’s PYUSD becomes sixth largest stablecoin on Solana - Read

• EigenLayer is introducing permissionless token support, allowing any ERC-20 token to be restakable - Read

• Coinbase teases cbBTC as competitor to WBTC - Read

• Arbitrum community looks to implement ARB staking - Read

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