The world’s leading cryptocurrency exchange doesn’t seem to show any signs of slowing down. Just today, it announced that it will issue a number of cryptocurrency-pegged tokens on its decentralized exchange starting with BTCB – a BEP2 token pegged to BTC.
Earlier today, the CEO at Binance, Changpeng Zhao came up with a tweet saying that 9001 BTC will soon be transferred for a “good thing.” Naturally, this caused immediate curiosity among members of the community, most of which praised the CEO for his transparency, as it’s always the case.
It wasn’t long after Zhao’s tweet the reason became evident. The world’s leading cryptocurrency exchange has announced its very first cryptocurrency-pegged token – BTCB.
Introducing: #Bitcoin-Pegged Token on #Binance Chain
Binance will issue a number of crypto-pegged tokens on Binance Chain in the coming days, starting with $BTCB, BEP2 token pegged to $BTC.
Which other tokens would you like pegged on Binance chain?http://t.co/aohKP8cRhf
— Binance (@binance) June 17, 2019
It is a BEP2-based one which will be pegged to BTC. Immediately after the announcement, the exchange also explained that this is the reason for the transfer of the 9001 BTC earlier today. It was also clarified that 9001 BTCB tokens were already minted.
BTCB will be 100% backed by Bitcoin and the reserve address can be found here. The announcement also outlines that large buy orders will be maintained on the trading pair on Binance.com and that there will be a price spread of about 0.1%, hence providing an easy way for anyone to convert from the pegged token to the native one on the main exchange.
As detailed in the official announcement, cryptocurrency-pegged tokens on Binance Chain bring a few distinct advantages.
For once, it allows traders on the DEX to receive exposure to coins which have their very own blockchains and are not native on Binance Chain. This should, in theory, also increase the volume and the liquidty, hence substantially improving the overall utility value of Binance DEX.
The announcement details that this can also provide a higher degree of transparency compared to fiat tethering as is the case of USDT, for example, because anyone can publicly audit the reserves at any time they want.
However, the post also says that Binance hasn’t excluded decentralized solutions such as cross-chain atomic swaps and that such are already being developed at the time of publishing the announcement.
Finally, Binance revealed that the BTCB/BTC trading pair will be announced within a “day or so” on the main exchange while issuing a proposal for DEX listing as well.