Maker (MKR) Governance Token Holders Approve Including Wrapped Bitcoin (BTC) as Acceptable Collateral Sort for MakerDAO

Maker (MKR) governance token holders have determined (by means of group voting) to approve a proposal which recommends including Wrapped Bitcoin (WBTC), an Ethereum-based token backed 1-to-1 by Bitcoin (BTC), because the decentralized finance (DeFi) protocol’s (MakerDAO) latest collateral kind.

WBTC is an ERC-20 compliant token that has been developed to be absolutely collateralized with BTC, the flagship cryptocurrency.

As talked about in a weblog put up revealed on Might 3, 2020, WBTC is now the fourth collateral kind which may be utilized by the MakerDAO ecosystem. Different tokens accepted as collateral embody Ether (ETH), Circle and Coinbase’s USDC stablecoin, and the Fundamental Consideration Token (BAT). These tokens are deposited in alternate for newly minted stablecoin Dai (DAI).

USDC was just lately added in March 2020.

The weblog put up famous:

“The addition of WBTC signifies that Bitcoin holders can now flip their BTC into WBTC (convey Bitcoin to the Ethereum blockchain), after which use it to generate Dai.” 

DaiStats knowledge exhibits that nearly $32,000 in DAI has been created, to this point, with WBTC getting used as collateral.

WBTC was launched in January 2019. Its market cap presently stands at round $10 million.

WBTC and different Bitcoin-based or tied ERC-20 tokens intention to extend BTC’s liquidity to Ethereum. These tokens additionally attempt to act as a bridge between the Bitcoin and Ethereum community, that are the world’s largest blockchain-based networks.

As talked about on its web site:

“WBTC brings larger liquidity to the Ethereum ecosystem together with decentralized exchanges (DEXs) and monetary functions. At the moment, the vast majority of buying and selling quantity takes place on centralized exchanges with Bitcoin. WBTC modifications that, bringing Bitcoin’s liquidity to DEXs (or non-custodial exchanges) and making it attainable to make use of Bitcoin for token trades.”

WBTC standardizes Bitcoin to the ERC-20 format. It additionally creates sensible contracts for Bitcoin, which helps with integrating BTC transfers.

It may be difficult to handle many alternative crypto community nodes and dealing with a number of totally different transaction sorts to help a number of currencies could be tough or generally impractical. With WBTC, cryptocurrency exchanges, wallets, and cost apps solely must handle an Ethereum node whereas having the ability to use Bitcoin.