The Binance Bridge boosts interoperability between various blockchains, it lets the users convert their Crypto assets into Binance Chain and Binance Smart Chain wrapped tokens. But have you wondered, why can this be so useful? Well, Binance Bridge is the way you can use your BTC, ETH, USDT, or other assets in Binance Smart Chain (BSC) DApps. Want to harvest the latest yield farming opportunity on BSC? Yes, now you can prolonged exposure to your Bitcoin while still engaging in DeFi on Binance Smart Chain.
Recently, there is an issue in the crypto space, various block chains can not actually work with each other. For instance if you want to complete the Bitcoin transaction, the Ethereum block chain automatically won’t work at the same time. If we dive deep and look into the upcoming days, this issue will likely be solved somehow by using various technologies. However, an easy and fast solution to this issue is already available as wrapped coins and tokens. Wrapped tokens allows you to use digital coins and tokens native to various block chains as tokens on a various chain, likewise Binance Smart Chain. Now let us continue with the Bianance Bridge.
What Is Binance Bridge?
A cross-chain bridging service that lines up to boost interoperability between various block chain with hi-tech security is known as Binance Bridge. It allows users to convert the particular coins selected by them into wrapped tokens that are used on Binance Chain and Binance Smart Chain, which escort digital coins such as BTC, ETH, USDT, LTC, XRP, LINK, ATOM, DOT, XTZ, ONT, and more to the Binance Chain ecosystem. Using Binance Bridge portal, you can access cross-chain liquidity on Binance Chain and Binance Smart Chain within a few clicks.
How the Binance Bridge Project Works?
Converting the digital assets into Wrapping coins through Binance Chain is actually an elementary task, with the help of Binance Bridge services, you can convert the digital assets or crypto coins between the native block chain and Binance chain or Binance Smart Chain. Let us take an example for the same; if you want to transfer USDT from Ethereum to Binance smart chain, the Binance bridge will help you out with cross-chain conversion of Ethereum ERC-20 to Binance BEP-2 or BEP-20. You must know that the wrapped tokens are backed by the real ones and tokens on public addresses. Recently, the binance bridge project supports ERC-20 and TRC-20 cross chain fetch. As all the users know, ERC-20 is a widely popular token standard on Ethereum. TRC-20 is just like the standard for the TRON network.
NOTE: Do you know? The BEP-2 is a token standard in Binance chain and the BEP-20 is a token standard on Binance Smart Chain, but the native currency of the both is BNB.
The benefit of using the Binance Bridge is to complete the conversion into a short duration and it takes only a few minutes to execute a cross-chain conversion after setting the parameters. However, this is totally up to the block chain network confirmation time, but you can trust the security standard in case the conversion takes a long time.
Another benefit of binance bridge is its fees, because it charges zero conversion fees, well, the user needs to pay network transaction fees on the block chains which is also not that high. Moreover, you don’t need the Binance account to use the Binance Bridge project, because the interface is open to any address without the need to log in with a registered Binance account. At the same time, if you don’t have the Binance account, then it won’t help you in deposit and withdrawal for the BEP-2 and BEP-20 assets. That is why, you can’t wrap the tokens also, and that is why you can’t store, trade, and transfer them like other tokens; thus, having a Binance Account is needed further.
Essential Concept To Know: “Peg-In” And “Peg-Out”
If you want to convert from native block chains to Binance Chain and Binance Smart Chain tokens then you must know the ‘Peg-in’ feature of the binance bridge project. On the other hand; if you want to convert from Binance chain and Binance Smart chain tokens to native block chain tokens, then the ‘Peg-out’ feature is the only option for you.
If you want to boost the cross-compatibility in the block chain space, then you need the Binance bridge project to understand thoroughly. If you know how to use the Binance bridge then you can easily peg coins and tokens to be used on Binance Chain and Binance Smart Chain. Also, the number of the tokens to support will increase over time, leading to good access to liquidity on Binance Smart Chain. Binance Bridge project is a small part of the Binance, that aims to boost even more the cross-chain liquidity between various block chains.