Binance-Peg DAIPrice

(DAI)

Binance-Peg DAI is a digital asset that exists on the BNB Chain, formerly known as Binance Smart Chain. It is a wrapped version of the original DAI stablecoin, which is a decentralized cryptocurrency issued by the MakerDAO protocol on the Ethereum blockchain. The primary purpose of Binance-Peg DAI is to enable the use of DAI within the BNB Chain ecosystem. Because the original DAI is native to Ethereum, it cannot directly interact with decentralized applications, lending protocols, or exchanges built on the BNB Chain. By creating a pegged version, Binance allows users to access the utility of DAI while benefiting from the BNB Chain's technical characteristics, such as faster transaction speeds and lower network fees compared to the Ethereum mainnet. The project operates through a process known as wrapping or pegging. This is managed by Binance as part of its token bridge program. When a user wants to move DAI from Ethereum to the BNB Chain, the original ERC-20 tokens are held in a secure reserve by Binance. An equivalent amount of BEP-20 Binance-Peg DAI is then minted on the BNB Chain and sent to the user. This ensures that every Binance-Peg DAI token in circulation is backed by one original DAI token held in custody. This 1:1 backing is intended to ensure that the value of the pegged token stays synchronized with the original asset. Users can also reverse this process through redemption. By sending Binance-Peg DAI back to the bridge, the pegged tokens are taken out of circulation, and the equivalent amount of original DAI is released from the reserve and returned to the user on the Ethereum network. Technically, Binance-Peg DAI follows the BEP-20 token standard, making it compatible with a wide range of wallets, decentralized finance platforms, and smart contracts within the BNB ecosystem. It is frequently used for activities such as providing liquidity to decentralized exchanges, participating in automated market makers, and acting as collateral in various blockchain-based applications. While it mirrors the utility of the original decentralized stablecoin, it is important to note that the pegging process itself is managed by Binance, making the pegged version a product of the exchange's infrastructure rather than a direct creation of the MakerDAO protocol. Learn more

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