In its recent blog post, the leading global crypto exchange Binance has announced, that the company will be launching tokens on Binance Chain that will be pegged to leading cryptocurrencies. The Binance Bitcoin-pegged token will be tradable on the crypto platform and proposed for trading on Binance DEX.
The article was updated on 20 November, 2019 by Amicus.
18 June, 2019, | AtoZ Markets – According to the crypto company’s announcement, Bitcoin (BTC) will 100% back Binance Bitcoin-pegged token (BTCB). The Bitcoin reserve addresses will be on the public blockchain for anyone to audit.
Binance Bitcoin-pegged token: how does it work?
A trading pair will be on Binance.com between the Binance token and the native coin- BTCB/BTC. Binance CEO Changpeng Zhao in his Twitter earlier today has announced BTCB/BTC listing on Binance.
The company explained, that this will simplify the conversion for users from the Binance Bitcoin token back into the native coin on Binance.com. Large buy orders will also maintain on the trading pair on Binance.com, with a price spread of around 0.1%.
However, if the buy order is filled, a new order will be placed. At a time, an equal amount of funds will be deposited from the reserved address into Binance.com. The sum of the buy order and the funds on the published reserve address will be bigger than the total supply of the Binance token, ensuring there is always 100% backing.
Binance token benefits
As the crypto exchange explained, that offering Binance token makes available to Binance DEX traders the many coins that have their own blockchains and aren’t native on Binance Chain. Thus, the increase in the selection of tokens is available on Binance DEX. It will affect an increase in trading volume and liquidity.
As a result, the utility value of Binance DEX would also increase. However, this approach is more centralized than atomic swaps, according to Binance. But it provides a higher degree of ease of use for most traders. Binance encourages other projects’ teams to follow their approach and issue Binance Bitcoin-pegged token of their own coins on Binance Chain.
For Binance Bitcoin-pegged token, the BTC reserve address is 3LYJfcfHPXYJreMsASk2jkn69LWEYKzexb. The company has just reserved 9001 BTC and minted 9001 BTCB. https://explorer.binance.org/asset/BTCB-1DE
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