Wrapped Bitcoin added as DAI collateral type to DeFi lending protocol Maker
May 3, 2020, 9:49AM EDT
1 min read
Maker governance token holders have approved a proposal that adds Wrapped Bitcoin (WBTC), an Ethereum-based token backed 1-to-1 by bitcoins, as the lending protocol's latest collateral type.
The finalization was announced in a May 3 blog post, and with the move, WBTC becomes the fourth collateral type on Maker (joining ETH, USDC and BAT) for the creation of the stablecoin DAI. USDC was added in mid-March.
"The addition of WBTC means that Bitcoin holders can now turn their BTC into WBTC (bring Bitcoin to the Ethereum blockchain), and then use it to generate Dai," the post noted.
Data from DaiStats indicates that nearly $32,000 worth of DAI has been minted thus far with WBTC as collateral.
WBTC went live in late January of last year, and according to current data, the market cap stands at just above $10 million.
A core concept behind WBTC and other bitcoin-tied ERC20 tokens is to extend bitcoin's liquidity to Ethereum, effectively serving as a bridge between the two networks. Other ERC20-based, bitcoin-pegged tokens have launched or are launching, as previously reported.