Binance, currently the largest cryptocurrency exchange by volume, has announced the implementation of cryptocurrency-pegged tokens on Binance Chain.
Pegged tokens are necessary for a decentralized exchange to be the bridge between various blockchains that aren’t native to the Binance Chain.
The first pegged cryptocurrency will be Bitcoin (BTC) with the introduction of BTCB — the Bitcoin representation in BEP2 token format.
Pegged tokens are 100-percent backed by the native coin in reserve, which is Bitcoin in BTCB’s case. Binance has already reserved 9001 BTC and minted 9001 BTCB. According to the company’s announcement, reserve addresses are published for anyone to audit.
The company acknowledges that this approach is more centralized than atomic swaps but is providing the solution due to its immediate availability.
This is a natural development, as not every cryptocurrency will be issued on the Binance Chain. The creation of crypto-pegged tokens on Binance Chain will also improve ease of use for market participants, including market makers, that should bring additional trading volume and liquidity on Binance DEX.
A trading pair on Binance.com for BTCB/BTC will follow shortly and the company will issue a proposal for the listing on Binance DEX as well. In the meantime, Binance CEO Changpeng Zhao is looking for suggestions on what asset in BEP2 format should be issued next on Binance Chain.
Which other tokens would you like pegged on Binance chain?https://t.co/aohKP8cRhf
— Binance (@binance) June 17, 2019
Recently, Binance.com announced that it’s closing its doors for U.S.-based customers, which account for a quarter of its trading volume.
What do you think of the new development? Does this mean Binance is rushing to get customers onto its Binance DEX? Let us know in the comments!
Images courtesy of Twitter.