MakerDao, Ethereum's largest DeFi, has facilitated the minting of over 4 million Dai stablecoins based on its newly added synthetic Bitcoin, wBTC.

This transaction was initiated by Nexo, a crypto lending platform, on May 20. It has since signaled the market demand for BTC's liquidity within Ethereum's DeFi ecosystem.

Earlier in May, we reported the addition of wBTC as collateral for DAI tokens following a vote by MakerDao's community. This digital asset has since joined the likes of USDC, BAT, and ETH which were already forms of collateral within the Maker protocol.

Barely a month into its integration, the 1:1 Bitcoin backed, wBTC, is already doing record numbers in the $1 billion DeFi market.

wBTC is an ERC-20 token created once an interested party has deposited Bitcoin with BitGo, which acts as the custodian. It can then be used to stake collateral on the Maker Protocol and borrow Dai stablecoins.

The idea is to scale exposure of DAI loans through the market's most liquid digital asset. Rune Christensen, the founder of MakerDAO, noted on twitter that there is indeed a market demand for non-ETH assets on DeFi platforms:

“It's the beginning of a broader trend of DeFi acting as an economic vacuum that will eventually attract almost all value to the Ethereum blockchain.”

According to DeFi Pulse, the wBTC market cap has already hit $21.7 million, having been in operation since January 2019. The initial minting, however, took place as recent as May 11 on Coinlist, where Nexo minted 999.6 wBTC. The Dai stablecoin generated from wBTC could be used for varied purposes such as interest-based lending.

The idea of BTC in Maker's Protocol was considered for some time but obtained precedence when ETH's price plummeted on March 12. Though the whole market had taken a hit, ETH's flash crash raised significant concerns within the maker community. At the time, they considered adding more stablecoins, bitcoin and tokenized gold as alternative collaterals.

Following this discussion, Maker included the USDC to reduce Dai's issues related to U.S dollar fluctuations. It was not long after that they announced the wBTC collateral in a bid to integrate with Bitcoin's liquidity. Currently, wBTC enjoys a first-mover advantage into the DeFi ecosystem although other players like tBTC are set to put up a challenge.

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