Binance has issued a Bitcoin backed Token called BEP2 (BTCB). The first wave saw Binance release 9001 BTCB, backed by a corresponding 9001 BTC on a specified Bitcoin Address.
The Token is one of many Binance will release on the Binance Blockchain and can be traded on the Binance Exchange and has been proposed for trading on the Binance DEX.
Why does Binance release a Bitcoin backed Token?
The goal of releasing a Bitcoin backed Token is to make Bitcoin available to traders on the Binance Decentralized Exchange.
The move allows Binance to offer Bitcoin trading pairs to users of their Binance DEX. One alternative to this approach would have been Atomic-Swaps. In a Blog Post from June 17th, Binance explains their thought process behind BTCB:
“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. Compared to fiat tethering, crypto can provide a high degree of transparency so that anyone can audit the reserves publicly, any time they want.”
With Bitcoin breaking the $10.000 mark this week, many traders on the Binance DEX will be happy that they managed to get their hand on some BTCB before this weeks price rally.
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