Bitcoin backed WBTC may be the need of the hour on DeFi
After noticing a constant rise in Bitcoin locked in Decentralized Finance [DeFi], the total BTC on the platform stood at 2.1k. Despite the tremendous losses noted by the DeFi in March, the value of BTC did not waver, rather remained stable. Adding to this stability, Maker approved WBTC as the collateral asset. Could WBTC become the favorite collateral asset in the DeFi ecosystem? There is a high chance of this happening; suffice it say it could present a tough competition to Ethereum [ETH] as collateral.
Being the fourth collateral asset to be added on DeFi, WBTC, or Wrapped Bitcoin is backed 1:1 by Bitcoin. This custodial BTC token has been looked at as a way to secure BTC collateral on the Ethereum blockchain, simultaneously also allowing MakerDao to tap into a previously inaccessible market with great interest, compared to ETH. BTC-led lending market constitutes a bigger share of open interest than ETH, indicating the demand for financing and leveraging.
Adding WBTC collateral might lead to an increasing supply of DAI due to the size of BTC lending, derivatives, and other products. The addition of WBTC has already seen 65,340.00 Dai being mined from WBTC, according to data provider Daistats. According to various discussions on Maker Governance Forum, contributors believed that there will be a compelling case for BTC leverage seekers to mint WBTC, which would be used in Collateralized Debt Position [CDP].
According to data, a total of 21.675 WBTC has been locked in the platform since the launch. This was equivalent to 1.93% of the total supply of the token. The token went live in January 2019 by BitGo and was aiming to inhibit the functionality of Ethereum token.