Binance will issue a number of tokens pegged to leading cryptocurrencies on Binance Chain to boost the number of trading options on its platform.
The tokens are also likely to be extended to Binance DEX, the firm’s recently launched decentralized exchange, as they create the potential to in effect move cryptos from different blockchains onto its network.
The company said in a blog post that it expects to release the first such token – one pegged to bitcoin and to be listed as BTCB – in the coming days. A trading pair will be created on Binance.com between the pegged token and bitcoin (BTCB/BTC).
The crypto-pegged tokens, based on the exchange’s BEP2 format, will be backed by Binance’s reserves of the pegged cryptocurrency. Before the news was announced Monday, CEO Changpeng “CZ” Zhao tweeted a warning of an impending move of bitcoin for the purpose.
There will be a transfer of 9001 BTC soon, no need to FUD. It’s for a good thing, details to follow. Waiting for whale_alert.
— CZ Binance (@cz_binance) June 17, 2019
Binance explained in the post:
“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,