In this article, you will learn what does Binance bridge 2.0 introduce. The internet is a revolutionary system partly because of its high interoperability. Blockchain bridges are critical to enhancing the blockchain industry's interoperability and mass adoption. They have enabled some essential innovations, allowing users to exchange assets between many blockchain protocols. Blockchain bridges have grown significantly in the number of bridges, users, and total transaction volume.
What is Binance Bridge?
Binance Bridge is a bridge service that provides access to inter-blockchain liquidity for Binance Chain and Binance Smart Chain decentralized applications and brings valuable assets, such as BUSD, USDT, and ETH to the Binance Chain ecosystem.
The Binance Bridge service uses what's known as “Peg-in” and “Peg-out” to allow users to transfer crypto-assets in and out of different blockchains. The Peg-in method allows users to swap native tokens in exchange for the equivalent amount of pegged tokens on Binance Chain or Binance Smart Chain. Conversely, Peg-out allows users to exchange pegged tokens for native tokens.
What Does Binance Bridge 2.0 Introduce?
Binance Bridge 2.0 introduces a new way to bridge listed and selected unlisted tokens from Ethereum to BNB Smart Chain as BTokens. You can use your wrapped tokens with the BNB Chain ecosystem and explore DeFi, blockchain games, metaverse, and more.
With Binance Bridge 2.0. you can wrap ERC20 tokens to receive BEP20 BTokens and immediately start staking your Ethereum or other supported assets with DeFi protocols running on the BNB Smart Chain. No more swaps, high fees, or long wait times for your transaction to complete . BTokens are pegged on a 1:1 basis to the underlying asset. You can redeem your BTokens back to the original asset at any time.
Binance Bridge 2.0 is a trusted bridge protected by the highest security standards of Binance, operating on the BNB Smart Chain with low fees of only a few cents and fast transaction times of just 3 seconds. Binance Bridge 2.0 will support almost all Ethereum-native tokens and give you direct access to BNB Smart Chain dApps such as the most-used dApp globally – PancakeSwap. Support for more blockchains and dApps is coming in the future.
How Do Blockchain Bridges Work?
The most common use case for a blockchain bridge is token transfer. For example, you want to transfer your bitcoin (BTC) to the Ethereum network. One way is to sell your BTC and then purchase ether (ETH). However, this would incur transaction fees and expose you to price volatility.
Alternatively, you can achieve this objective by using a blockchain bridge without selling your crypto. When you bridge 1 BTC to an Ethereum wallet, a blockchain bridge contract will lock your BTC and create an equivalent amount of Wrapped BTC (WBTC), which is an ERC20 token compatible with the Ethereum network. The amount of BTC you want to port gets locked in a smart contract, and the equivalent tokens on the destination blockchain network are issued or minted. A wrapped token is a tokenized version of another cryptocurrency. It's pegged to the value of the asset it represents and typically can be redeemed for it (unwrapped) at any point.
Bottom Line
This cross-chain bridge significantly improves interoperability between different blockchains and gives you direct access to the world of DeFi on the BNB Smart Chain. This is about what does Binance bridge 2.0 introduce.
