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That scam is called wrapped Bitcoin.

"Hey give us your BTC for a handful of shit they will definitely break just as soon as we get a Producer's moment."

A Producer's moment is like from the Mel Brooks film The Producers. At a certain point these scams become profitable to intentionally tank. This is when the devs do a rug pull because it's more profitable to fail than to succeed.

Every stablecoin will experience this. Insuring against it is absolutely a loss waiting to happen. So these scams will absolutely keep wrecking people every time Bitcoin corrects in price from the halving cycle. So every 4 years.

When each stablecoin breaks, the devs just walk away with all YOUR COLLATERAL. And what is that collateral? Your BTC.

JUST HOLD BTC ON CHAIN IN SELF CUSTODY