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Binance Upgrades Blockchain Bridge to Connect DeFi and CeFi
The firm behind the exchange is continuing its infrastructure push.
Updated May 11, 2023, 4:07 p.m. Published Mar 29, 2022, 1:00 p.m.
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Binance, the world's largest cryptocurrency exchange by trading volume, has launched the second iteration of its cross-chain protocol that connects its flagship layer 1 blockchain, BNB Chain, with other chains.
- Binance Bridge 2.0 will be compatible with more blockchains, feature a better user experience and decrease maintenance costs, the firm said in a press release shared with CoinDesk on Tuesday.
- The bridge will allow users to access traditional centralized finance (CeFi) and decentralized finance (DeFi) via the Binance app. Decentralized finance refers to financial activities carried out on the blockchain without any intermediaries.
- Binance rebranded its layer 1, or base, blockchain to BNB Chain in February as it pushed towards being a key blockchain infrastructure provider. The bridge is an important element of that push, as it allows users and developers to bring other tokens to Binance's ecosystem.
- Through the bridge, users can bring unlisted tokens on BNB Smart Chain as B-Tokens, the press release said. B-Tokens are tokens pegged to the value of some underlying cryptocurrency. This technology, known as wrapping, is used to move tokens from one blockchain protocol to another by essentially mirroring them.
- Tokens that are listed on Binance's crypto exchange will be stored in Funding or Spot Wallets, whereas unlisted tokens will be saved on Funding Wallets. BNB Smart Chain is a blockchain that is compatible with the Ethereum Virtual Machine (EVM), where smart contracts are executed. Funding wallets facilitate peer-to-peer transactions.
- The bridge comes with a new automated circulation control system for B-Tokens, which will only keep a buffer surplus of the wrapped tokens in hot wallets and mint new ones when users bring tokens from different blockchains on BNB Smart Chain. The rest of the circulating supply of tokens will be backed by the native tokens bridged to Binance's ecosystem.
- Separately, BNB said that scaling platforms Celer, Ankr, and NodeReal launched the first BSC Application Sidechain (BAS) testnet.
Read more: Binance Smart Chain Rebrands to BNB Chain
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