Binance has announced the launch of the BTCB token, which is anchored to bitcoin, on its Binance Chain blockchain.
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, a BEP2 token pegged to $BTC.
Which other tokens would you like pegged on Binance chain?https://t.co/aohKP8cRhf
— Binance (@binance) June 17, 2019
This will be a BEP2 token with the same value as BTC. It is part of the exchange’s initiative to bring several tokens anchored to the main cryptocurrencies on its blockchain.
BTCB will be the first of these BEP2 tokens to replicate the value of the major cryptocurrencies and will be used for trading on the Binance DEX.
In fact, Binance’s decentralised exchange is based on the Binance Chain and in order to allow users to trade in a quick and cheap way using their own wallet, it is necessary to use BEP2 tokens.
BTCB tokens will be 100% backed by BTC, and the public addresses on which BTC will be stored will be viewable by anyone.
A special trading pair will then be created on the DEX with Binance Coin, BTCB/BNB, so that it will be possible to trade bitcoins on the Binance blockchain without having to move BTC.
On Binance.com it will also be possible to convert BTCB tokens into actual bitcoins.
The main advantage of this is the availability of many cryptocurrencies on the DEX that have their own blockchain, in the hope that the increase in the number of available tokens will also increase the trading volume and liquidity of the new decentralised exchange.
This approach is called “more centralised than atomic swaps,” but is intended to provide a higher degree of user-friendliness for most users.
The company is also considering other solutions, based on atomic swaps, but they are still being studied.
Compared to tethering with fiat currencies, tethering with cryptocurrencies provides a higher level of transparency, because by disclosing the public addresses in which the underlying assets are stored, anyone can check at any time the actual amount of the reserves held.
As far as BTCB is concerned, the backup public address where the underlying BTC are stored is 3LYJfcfHPXYJreMsASk2jkn69LWEYKzexb.
For the time being, 9,001 BTC have been set aside at this address, and in fact, 9,001 BTCB tokens have been minted. To check the BTCB tokens in circulation you can visit the relevant page on the Binance Chain explorer: explorer.binance.org/asset/BTCB-1DE.
