Binance Announces Bitcoin-Pegged Token on Binance Chain
Binance, the major cryptocurrency exchange announced BTCB, which is a bitcoin(BTC) pegged token. On June 17, in a blog post, it was announced on Binance Chain, the native blockchain.
The new launched BEP2 token as per the announcement goes would be traded on Binance and it would also stay available on Binance DEX, its decentralized counterpart. This asset is only a part of the cryptocurrency pegged token series which the company wants to launch on the Binance Chain.
The BTCB post states that they are a hundred percent backed by bitcoin. They have made the reserves easily visible by recording it on their public blockchain. Binance states that when bitcoins are used as the backing asset for this new token, the audits can be held more convenient since the wallets are already available to everyone through their public blockchain explorer.
More on the tokens!
The token on Binance can be traded against the BTC, which allows the users to exchange their BTCB for the original asset to which it was pegged. In the post, it has been explained that how the creation of the cryptocurrency pegged tokens will give the users of Binance DEX, the access to tokens which have their very own blockchain and is not a part of the Binance Chain.
Moreover, Binance also states that the increased selection of the tokens on this decentralized exchange would result in an increase in the liquidity and the volume. However, the company admits to the fact that an approach like that would compromise the decentralization.
Earlier today, a tweet made by Changpeng Zen, Binance’s CEO has issued a statement that the exchange was supposed to move 9,001BTC. Then he posted another tweet some hours later than the previous one where he had confirmed that the exchanged funds were meant for the backing of bitcoin backed toke.
What Can The Pegged Tokens Offer
One of the mains benefits which these tokens offer is the increase in the utility value of the Binance DEX. When though this approach has been characterized with high levels of centralization compared to the atomic swaps, it cannot be ignored that these tokens would be very easy to use for most of the traders out there. This crypto tethering also ensures a high degree of transparency. To make the conversion between the native coins and the pegged tokens, Binance would be maintaining large buy orders with an approximate 0.1% of price spread. A new order will be filled after a buy bitcoin order is filled. Simultaneously, the necessary funds would be deposited to the platform from the reserved address.
In their blog post, they have also turned to different project teams in order to encourage them for introducing tokens of their very own coins on the Binance Chain. Even in their Twitter account, they have asked their followers for any fresh ideas for tokens which can be pegged.
Within a day or so, the BTC/BTCB trading pair can be expected to be available on the website of Binance.