DAI is mostly minted from ETH, at a rate of $150 collateral to $100 DAI. https://daistats.com/#/. The $200m DAI minted from WBTC represents 0.02% of Bitcoin's market cap.
Or do I have that all wrong? I really am not sure that I grok how this works, at all. I'm trying to figure out what is going on in this space and you seem to know a lot more about it than I do. I couldn't figure out another good reason to use an overcollateralized loan but it's clearly something people are interested in and using as a selling point for DeFi.
What actually happens if the borrower defaults on the loan? Do they "just" lose their collateral, or can they be held to account for the DAI somehow too?