Bitcoin-pegged token on Binance Chain introduced

Binance announced on 17 June about launching tokens on Binance Chain that will be pegged to leading cryptocurrencies. This would start with a Bitcoin-pegged token.

The world’s largest cryptocurrency exchange by volume would issue a number of crypto-pegged tokens on Binance Chain (BEP2 token format) shortly, starting with Bitcoin-Pegged Token (BTCB). Binance clarified that it was going to make its first token pegged to leading cryptocurrencies available for trading on its website very soon. Added to this, it would propose it for trading on Binance DEX.

Adding on the multi-benefits of such an offer, Binance noted –

“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. 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 briefly offered to enlighten on how the process works. Pegged tokens such as BTCB, are 100% supported by the native coin, which is Bitcoin (BTC) in BTCB’s case. The reserve addresses are accessible for anyone to audit. The blockchain offers a much versatile way to audit a crypto reserve than a traditional bank balance. A trading pair will be created on the website between the pegged token and the native coin.

Binance clarified that it was going to make its first token pegged to leading cryptocurrencies available for trading on its website very soon.

Binance sustained by adding that large buy orders would be maintained on the trading pair with a price spread of roughly 0.1%. This provides an easy way for anyone to convert from the pegged token back into the native coin on the website. If this buy order is filled, a new order will be placed while an equal amount of funds will be deposited from the reserved address into the portal.

Similarly, in May, Chiliz, the digital currency for sports and media platforms, has announced a strategic partnership with Binance Chain to bring household names into crypto space. Chiliz expressed about Binance Chain as a blockchain software system built by Binance and its community. The digital currency firm opined that with this embrace, it would bring global brands such as Juventus and Paris Saint-Germain into the purview of digital coins.

Binance wrapped up by adding a little more on the benefits. Binance admitted that the chosen approach is characterized by a much higher level of centralization if compared with the conventional approach. Binance indicated that for the majority of traders, these tokens will be absolutely easy to use.