Binance Announces New Crypto-Pegged Tokens Coming to Its Blockchain

Crypto exchange giant Binance has announced that it will be issuing a number of tokens pegged to leading crypto assets on Binance Chain in order to provide users more trading options.

The first such token, BTCB, will be pegged to bitcoin. The exchange will also be creating a trading pair, BTCB/BTC, on Binance.com between BTCB and bitcoin. The same will be done for the other coming crypto tokens and the crypto assets to which they are pegged.

Large buy orders will be maintained on the trading pair on Binance.com, with a price spread of around 0.1%,” the exchange explained in an official blog post. “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.

Binance notes that these reserve addresses will be published on the blockchain, so it will be easier to audit the new tokens compared to traditional bank reserves.

More volume, liquidity, utility

Binance will be using its own crypto reserves to back their new crypto-pegged tokens, which are being based on the exchange’s BEP2 format.

According to the Binance team, increasing the number of token option on Binance DEX will help increase trading volume and liquidity, which will, in turn, increase the platform’s utility and value.

The exchange is also opting not to use decentralized approaches to introduce non-native tokens on the DEX.

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,” Binance said.

The company is also encouraging its clients to issue their own pegged tokens on the Binance chain. Binance has offered help facilitating a pegged/native pair, although it has not guaranteed that such help will be available for everybody.

Earlier this month, Binance revealed plans to launch its own stablecoins on its blockchain. The company is also currently prepping for the launch of a US-exclusive exchange.