The community decided this Sunday to add WBTC to “bring more liquidity to the log”.
Although it is offered as an option to bring Bitcoin into the Ethereum network, it is not.
This Sunday, May 3rd, the MakerDAO community approved the inclusion of the WBTC token (ERC-20) as the fourth collateral object on its platform. With this decision, the protocol users can generate DAI with crypto activity that is anchored to Bitcoin in the Ethereum network.
In a statement published on its official blog, MakerDAO reported that the choice of WBTC will bring “more liquidity” for decentralized financial ecosystems (DeFi) and decentralized exchanges (DEX).
«By adding WBTC, Bitcoin holders can now convert their BTC to WBTC (bring Bitcoin to the Ethereum blockchain) and then generate DAI (…). The flexibility of the Maker protocol means that almost any type of asset that can be tokenized is available as a guarantee if it has the appropriate risk parameters and has been approved by Maker Governance, ” was reported this Sunday.
At this point, certain aspects have to be clarified. First of all The community’s decision is not to put “Bitcoin” on the Ethereum network because it wants to advertise. The goal of the announcement would be more related to an advertising strategy to promote the use of DAI and not a new integration through a token that only serves as a price marker.
In this way, it is indirectly admitted that the intention is to “sell” the end product, which in this case is the end product, when it is said that an attempt is being made to bring more liquidity to the record Stablecoin DAI. All this in the middle of what the next one will represent cut in half Bitcoin, a major event within the cryptocurrency community that is drawing international media attention.
To say that Bitcoin comes to Ethereum via an ERC-20 token to buy DAI is at least misleading. MakerDAO’s blog sells the idea that enthusiasts can now generate DAIs with Bitcoin. But that’s something that’s not entirely true and that this could lead to greater confusion, aspects that could have the opposite effect before promoting greater acceptance.
Behind the WBTC token (ERC-20) are the cryptocurrency management companies BitGo and the decentralized exchange offices Kyber Network and Republic Protocol, a fact that has also been questioned by users.
The possibility of centralizing the generation of DAI was discussed in social networks. a fact that would violate the nature of the protocol. Therefore, one of the comments was from the user @DegenSpartanwho released on twitter.
“Currently about 10% of the DAI comes from USDC collateral (as an asset). Under current parameters, 21% of the DAI can be covered by assets that depend on individual companies, Circle (USDC) or BitGo (WBTC). What happens if it is 30%? 50%? 90%? When will DAI be centralized from decentralized to? He wrote on the social network.
MakerDAO’s decision is made less than two months after the admission of the Stablecoin USDC as collateral support for the operation of the platform. As a result, four securities are now included in the protocol, which also take into account ETH and BAT.
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