Before, however, delving into today's article, first, we will define what tokens are. Tokens are digital representations that signify some form of asset with value or utility. They can be issued on various blockchain networks, each with its native token of representativeness.
Next, I will explain with a focus on the specificities of tokens that are "wrapped" and "pegged" by Binance in a 1:1 ratio with the corresponding native Blockchain token:
- Wrapped Tokens:
A wrapped token is a representation of a native token from one blockchain network that has been "wrapped" or converted into a compatible format to be used on another blockchain network. For example, $ZEC coin on the Zcash Blockchain, Binance can create an equivalent version of $ZEC on their own blockchain ("Wrapped $ZEC") that mirrors the value and behavior of the original $ZEC on the Zcash Blockchain. This allows $ZEC to be used within the Binance ecosystem even though it's from a different blockchain.
- Pegging on a 1:1 Ratio:
The phrase "pegged on a 1:1 ratio" means that the wrapped $ZEC value is directly linked to the value of the corresponding native Zcash. In this case, the Wrapped $ZEC created by Binance has a value that is always equal to $ZEC on its original blockchain. So, if $ZEC on native Blockchain is worth $30, then 1 Wrapped $ZEC on Binance's blockchain will also be worth $30. This ensures that the value of the wrapped token stays in sync with the native coin it represents.
- BEP20 Token standard by Binance
BEP20 is a technical standard used on the Binance Smart Chain (BSC) for creating and managing tokens. It is similar to the ERC20 standard on the Ethereum blockchain. By supporting BEP20 token at Binance.com, Binance allows users to move their BEP20-based tokens (including wrapped tokens) between users personal wallets and their Binance accounts. This gives users the flexibility to move their wrapped tokens in and out seamlessly.
To sum up, Binance creates wrapped tokens that are equivalent to native tokens from other blockchain networks. These wrapped tokens have their value pegged to the corresponding native token at a 1:1 ratio. In addition, Binance allows users to move this BEP20 tokens (sell, trade, hold) at their exchange or in exchange that supports this token standard.
This integration enables users to access and utilize their assets across different blockchain ecosystems with ease.
- Binance-pegged Zcash BEP-20 token contract address and more
Contract Address: 0x1Ba42e5193dfA8B03D15dd1B86a3113bbBEF8Eeb
Binance smart chain Hot wallet 20: 0xf977814e90da44bfa03b6295a0616a897441acec
There are 100,000 Binance-pegged Zcash BEP-20 tokens, 75,000 in circulation, with several hot wallets belonging to the world's largest cryptocurrency exchange, which allows users to trade on its platform and also withdraw funds. For example, Binance Hot Wallet 20 holds approximately 21,874 Binance-pegged Zcash tokens, valued at over $658,000, and it holds over 21% of the circulating coins in the BEP-20 token standard.
Therefore, in summary and as a conclusion, this is not a scam token but rather wrapped and pegged coins by Binance. There are also others like Ethereum, Bitcoin Cash, Litecoin, and others that also have coins in the BEP-20 standard with a 1:1 ratio.
Article only for informational purposes
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