Binance Announced Bitcoin-Pegged Token (BTCB) on Binance Chain

| Updated
by Julia Sakovich · 3 min read
Binance Announced Bitcoin-Pegged Token (BTCB) on Binance Chain
Photo: Binance

Binance will introduce crypto-pegged tokens on Binance Chain. A Bitcoin-pegged token (BTCB) will be traded on Binance and proposed for trading on Binance DEX.

Binance, the world’s largest cryptocurrency exchange by volume,  will issue a number of crypto-pegged tokens on Binance Chain (BEP2 token format) in the coming days, starting with Bitcoin-Pegged Token (BTCB).

The company is going to make its first token pegged to leading cryptocurrencies available for trading on Binance.com quite soon. Moreover, it will also try to push this new token to its decentralized platform, so, it will propose it for trading on Binance DEX.

Peculiarities of Crypto-Pegged Tokens

In its blog post on Medium,  the company explains what pegged tokens represents themselves. The peculiarity of pegged tokens is that they are fully backed by the native coin in reserve. BTCB is not an exception. It is 100% backed by the native coin as well. In its case, it is Bitcoin.

The reserve addresses are openly published. So, everyone can easily to audit a crypto reserve that is said to back the coin. It is much more convenient to check crypto reserves that fiat ones kept on traditional banking accounts.

To facilitate the conversion between the pegged token and the native coin, Binance will maintain large buy orders on the trading pair on Binance.com with a price spread of approximately 0.1%.

When one buy order is filled, there will be formed a new order. At the same time, the necessary amount of funds will be deposited from the reserve address to the platform. 100% backing of the token will be ensured by the sum of the buy order and the funds on the published reserve address as this figure will be higher than the overall pegged token supply.

Binance CEO tweeted prior to the announcement:

The company has just reserved 9001 BTC and minted 9001 BTCB (you can see it in the Explorer here). For BTCB, the BTC-pegged token on Binance, the BTC reserve address is: 3LYJfcfHPXYJreMsASk2jkn69LWEYKzexb

What Pegged Tokens Can Offer

“The main benefit of offering crypto-pegged tokens is that, obviously, this makes available to Binance DEX traders the many coins that have their own blockchains and aren’t native on Binance Chain,” according to the blog post. “With the increase in the selection of tokens available on Binance DEX, there should be an increase in trading volume and liquidity, This would further increase the utility value of Binance DEX.”

Binance team admits that the chosen approach is characterized by a much higher level of centralization if compared with atomic swaps. Nevertheless, it has other important advantages. For the majority of traders, these tokens will be absolutely easy to use.

Moreover, crypto tethering ensures a higher degree of transparency than the usage of fiat assets for backing digital ones. In combination with the trust that the majority of traders already have to Binance.com, BTCB has all chances to become one of the most reliable assets for the crypto community.

In its blog post, Binance has also turned to project teams to encourage them to introduce token of their own coins on Binance Chain. On its Twitter account, it has even asked the followers for fresh ideas of other tokens that can be pegged.

The BTCB/BTC  trading pair will become available on Binance.com in a day or so. The company is also planning to issue a proposal for DEX listing as well.

Altcoin News, Binance News, Bitcoin News, Cryptocurrency news, Editor's Choice
Julia Sakovich
Editor-in-Chief Julia Sakovich

Having obtained a diploma in Intercultural Communication, Julia continued her studies taking a Master’s degree in Economics and Management. Becoming captured by innovative technologies, Julia turned passionate about exploring emerging techs believing in their ability to transform all spheres of our life.

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