MakerDAO Approved Wrapped Bitcoin As Collateral Asset

WBTC will be used in addition to ETH, BAT and USDC to open maker vaults to generate DAI stablecoins.

The decentralized community of MakerDAO accepted Wrapped Bitcoin on its Ethereum-based DeFi protocol to generate DAI stablecoins.

MKR token holders announced on May 3 of adding Wrapped Bitcoin (WBTC) as a new collateral asset to its Maker decentralized finance (DeFi)protocol. WBTC is a fourth asset approved by MakerDAO governance and will be used in addition to ETH, BAT, and USDC to open maker vaults in order to generate DAI.

According to the official statement, wrapped Bitcoin (WBTC) will help bring greater liquidity to the Ethereum and decentralized finance (DeFi) ecosystems, and to decentralized exchanges.

First Bitcoin on Ethereum blockchain

Wrapped Bitcoin (WBTC) is the first ERC20 token backed 1:1 with Bitcoin. As it’s said on its website, WBTC is community-led, transparent, and verifiable.


Furthermore, WBTC will act like an asset, that helps to bring Bitcoin to the Ethereum blockchain. According to the post, since the day of the announcement, it can be used to open a vault to generate DAI stablecoins.

The existence of WBTC brings more liquidity to the Ethereum ecosystem, including decentralized exchanges, wallets, and payment applications. Since WBTC standardizes Bitcoin to the ERC20 format, it becomes possible to use it for token trades.

Ethereum-based DeFi on the rise

As DailyCoin reported last month, the decentralized finance (DeFi) industry is growing rapidly. The total transaction volume across various blockchains has grown nearly $8 billion over the year. Furthermore, the major part of these transactions was generated by Ethereum protocol.


Since Ethereum network is constantly growing, Ethereum-based DeFi projects are its main volume drivers with an increase of transaction volume up to 778% compared to the previous year. Meanwhile, most of the volume of Ethereum-based DeFi protocols were made in ERC20 tokens, such as USDC or DAI.

This article is for information purposes only and should not be considered trading or investment advice. Nothing herein shall be construed as financial, legal, or tax advice. Trading forex, cryptocurrencies, and CFDs pose a considerable risk of loss.

Milko Trajcevski

Milko Trajcevski is a DailyCoin news reporter, mainly focused on Ethereum (ETH), Cardano (ADA), and their founders (Vitalik Buterin and Charles Hoskinson). Milko is an avid follower of crypto and blockchain technology and has written thousands of articles on the subjects. He finds joy in transforming complex issues into written content that anyone can understand. Milko has used and analyzed numerous exchanges, such as Coinbase, FTX, and Binance. He also closely follows all of the latest news around the largest decentralized exchanges (DEXs). Location: Skopje, Macedonia