MakerDAO governance has voted to pull Bitcoin to the Ethereum blockchain by accepting Wrapped Bitcoin as a new collateral asset in the Maker Protocol, as for the uninitiated, wBTC is the first ERC20 token backed 1:1 with Bitcoin.
On May 3, it has been reported that wBTC marks the fourth collateral asset type to be added to the MakerDAO DeFi ecosystem.
The former three included:
However, wBTC will now be able to open Maker Vaults in order to generate Dai.
The report said:
“WBTC will help bring greater liquidity to the Ethereum and decentralized finance (DeFi) ecosystems, and to decentralized exchanges (DEXs).”
It has been analyzed that Bitcoin holders can trade their BTC to open a vault and generate Dai through wBTC.
MakerDAO token holders accept wBTC as a new collateral asset in the DeFi prototal, bringing BTC to the ETH blockchain https://t.co/h0b5xBblaB — Cointelegraph (@Cointelegraph) May 3, 2020
According to the report, the process of opening a vault can be done on Oasis Borrow, a decentralized finance platform, as the conversion takes 5 steps to complete.
Thus, the report also said that the first users sign up to Coinlist, complete KYC, wrap BTC to wBTC, send wBTC to a compatible wallet, and then create a wBTC vault to generate new DAI.