MakerDAO Adds BTC to its Rapidly Expanding List of Acceptable Collateral

May 4, 2020 7:54 PM UTC

The cryptocurrency community has long pushed the narrative that Bitcoin is a viable store of value. A new announcement coming from the MakerDAO ecosystem adds a new layer of legitimacy to the push. 

The proposal to accept Wrapped Bitcoin (WBTC) as collateral has been accepted by MKR token holders. The new collateral asset will be an Ethereum-based token pegged 1:1 by BTC within the Maker Protocol.

The May 3 blog post confirms that Maker governance token holders finalized the WBTC approval. The boost in WBTC’s utility will carry new liquidity to Ethereum, DEX, and DeFi ecosystems. Furthermore, the asset becomes the fourth collateral type approved by Maker, alongside BAT, USDC, and ETH. WBTC can now be used as collateral for the creation of DAI. 

The blog also noted, “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 decision makes the Ethereum ecosystem more welcoming to the much larger Bitcoin community.

Maker Foundation Recent Addition

DaiStats analysis shows that Maker has minted DAI worth more than $30,000 with WBTC as collateral. While this amount is insignificant compared to the market cap of Bitcoin, it’s a step towards something that could blossom quite positively. 

MakerDAO has also listed tBTC on its platforms. The addition of tBTC allows users to enter the tBTC decentralized application (DApp), transfer their BTC into the lockup wallet address, and subsequently mint tBTC tokens for their Ethereum wallet. 

The goal of offering tBTC is to create an alternative native solution for minting BTC-pegged tokens on the Ethereum blockchain for users who are unfamiliar with wrapped tokens and WBTC. 

Given that the number of crypto wallets holding one or more bitcoins has reached a new all-time high, welcoming BTC holders into Ethereum-based DeFi ahead of any competing smart contract chain positions MakerDAO to maintain its status as the leading DeFi product in the entire blockchain space.

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