Jun 17, 2019 17:31 UTC
Jun 17, 2019 at 19:00 UTC
Binance Launches New Bitcoin-Pegged Crypto Token
Top crypto exchange Binance has recently announced the launch of a new crypto token pegged to Bitcoin, on its native blockchain- Binance Chain. It is called BTCB and it was introduced to the world via a Binance blog post published on the 17th of June, 2019. It will be a BEP2 token, tradeable for its users on both Binance as well as Binance DEX, a decentralized exchange from the house of the same crypto exchange.
According to the announcement, this is only one of the series of crypto-pegged tokens that will be launched on its native Binance Chain. These BTCB tokens will be backed entirely by Bitcoin, and the reserves of Bitcoin against which such tokens are held will be clearly visible on the public blockchain. This will make for simpler and more transparent audits, with information easily accessible to anyone through a public blockchain explorer.
As the post emphasizes:
“The blockchain offers a much easier way to audit a crypto reserve than a traditional bank balance tether.”
As for the process of trading, the post mentions:
Large buy orders will be maintained on the trading pair on Binance.com, with a price spread of around 0.1%. This provides an easy way for anyone to convert from the pegged token back into the native coin on Binance.com. If this buy order is filled, a new order will be placed while an equal amount of funds will be deposited from the reserve 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 pegged token, ensuring there is always 100% backing.”
On Binance, users will be able to exchange BTCB for Bitcoin, the native asset to which it has been pegged. Having created this token, Binance plans to help users of Binance DEX access to tokens with their own native blockchains beyond the Binance Chain. Having more tokens on Binance DEX will also lead to an increase in the liquidity and volume. The post also addresses the issue of decentralization being compromised, saying that:
“While this approach is more centralized than atomic swaps, we believe it provides a higher degree of ease-of-use to most traders. And most traders are already trusting Binance.com to hold their funds anyway.”