• The MakerDAO governance voted in favor of supporting Bitcoin's addition 
• Bitcoin becomes 4th asset capable of generating DAI
• Wrapped Bitcoin (wBTC) expected to increase liquidity for DeFi 

On May 3, the MakerDAO’s governance community voted in favor of making wrapped Bitcoin (wBTC) a new collateral asset in the Maker protocol, the MakerDAO team announced in a blog post. This new asset effectively means that Bitcoin is available on the Ethereum (ETH) blockchain, which is what the MakerDAO network is based on.

The wBTC asset was jointly initiated by Kyber, Ren, and BitGo and has existed since early 2019, made with the express purpose of making it easier to write smart contracts that integrate Bitcoin transfers.

Saying that “Wrapped Bitcoin (wBTC) acts a bridge to bring BTC to the Ethereum blockchain” and that it is “the first ERC20 token backed 1:1 with Bitcoin.”, all it would take for users to generate DAI through Bitcoin (BTC) would be for them to wrap BTC to wBTC, send it to a compatible wallet and then create a BTC vault to generate DAI. This can be done through MakerDAO’s Oasis Borrow Portal. The announcement reads,

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 MakerDAO governance community frequently makes decisions on various proposals and is a key part of the ecosystem. Several community members weighed the pros and cons of listing BTC as an asset, with many supporting the addition. 

The Maker team has done much to increase the list of available assets as collateral on the network. The network last year saw the introduction of Multi-collateral DAI i.e. DAI based on collateral besides Ether. The first asset that was approved as collateral was the Basic Attention Token (BAT), which was followed by USD Coin (USDC). This makes Bitcoin the fourth such asset to be listed, of which the announcement says,

WBTC will help bring greater liquidity to the Ethereum and decentralized finance (DeFi) ecosystems, and to decentralized exchanges (DEXs).