Binance-Peg XRP

Wrapped Tokens on Binance represent cryptocurrencies pegged to the value of another crypto asset. These tokens are issued by Binance and are designed to maintain a 1:1 ratio with their corresponding native tokens. This mechanism allows assets from other blockchains to be used within the Binance ecosystem, particularly on the Binance Smart Chain (BSC).

Purpose and Functionality

The primary purpose of wrapped tokens on Binance is to facilitate interoperability. By wrapping a native token, its value can be represented on a different blockchain, enabling its use in various decentralized finance (DeFi) applications and trading pairs that might not otherwise support the original asset.

BEP20 Standard

• Many of these wrapped tokens adhere to the BEP20 token standard, which is native to the Binance Smart Chain.
• This standard ensures compatibility with the BSC ecosystem, including decentralized exchanges (DEXs) and lending platforms.
• Users can typically deposit and withdraw these BEP20 tokens directly through Binance.com.

Pegging Mechanism

Binance maintains the 1:1 peg by holding an equivalent amount of the native asset in reserve for each wrapped token issued. This collateralization aims to ensure that the wrapped token's value remains stable relative to the underlying asset.