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WBTC becomes collateral for DAI
WBTC becomes collateral for DAI
Defi

WBTC becomes collateral for DAI

By Alfredo de Candia - 4 May 2020

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Yesterday a vote took place that added the possibility to use wBTC, the ERC20 token pegged 1:1 with Bitcoin (BTC), to open positions and generate DAI using this asset.  

As can be seen from the announcement, the decision to use wBTC (wrapped Bitcoin) was accepted after a long series of risk assessments

At the moment, there are 4 crypto assets that allow generating DAI, as a result of the possibility to have multiple collaterals, namely Ethereum (ETH), Basic Attention Token (BAT), USDC and now also wBTC. 

In addition to this introduction, during the vote also the risk parameters of this asset have been set: 

  • Stability Fee: 1%.
  • Debt ceiling: 10,000,000,000
  • Liquidation Ratio: 150%
  • Auction lot size: 1 W-BTC
  • Minimum supply increase: 3%
  • Duration of the offer: 6 hours
  • Maximum duration of the auction: 6 hours
  • Liquidation penalty: 13%.
  • Dust: 20 Dai

The procedure for opening the vault with this asset is already open and of course it is also possible to automatically generate wBTC from the various partners. Meanwhile, those who are not very familiar with these tools or do not want to waste time creating wBTC can always use exchanges, such as Kyber or Uniswap and then open the vault.

Bitcoin locked on WBTC

More than 1000 BTC are locked in wBTC, just under $10 million, and this will increase the volume of both wBTC and DAI generated and provide more liquidity. 

Surely this is positive news and which brings some confidence in the Maker project, especially after the choice disputed by several users about adding a centralized stablecoin like USDC, even if it was a situation already foreseen and which, after the crypto crash, became necessary. 

 

Alfredo de Candia
Alfredo de Candia

Android developer for over 8 years with a dozen of developed apps, Alfredo at age 21 has climbed Mount Fuji following the saying: "He who climbs Mount Fuji once in his life is a wise man, who climbs him twice is a Crazy". Among his app we find a Japanese database, a spam and virus database, the most complete database on Anime and Manga series birthdays and a shitcoin database. Sunday Miner, Alfredo has a passion for crypto and is a fan of EOS.

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