Almost all exchanges today have solution to the stablecoin issue. Allow traders to keep their funds safe in a pegged coin and avoid the volatility of the market. How does Binance's solution compare to its competitors?
Background
The coin's lifespan starts with Binance, the exchange that is it's father & creator. Binance was founded in July 2017 with a starting fund of 15 million dollars by the CTO if OKcoin. This funding was raised to offer an initial coin with the launch of the platform, that coin being BNB. Binance later partnered with Paxos to follow up this success with a stablecoin of their own to match their smart contracts, this was BUSD. It is fully backed by fiat held by Binance & Paxos. Their inital offering of BUSD began in 5th of September 2019. The coin exists on Binance Chain, Binance Smart chain & Ethereum and can be used and transferred between these.
Network
This coin has no consensus method as it is held and regulated by Binance and Paxos. They regulate the supply based on demand and burn tokens to adjust the price creating a 1:1 peg. This is done by smart contracts The token can easily be moved between BSC, BEP & ERC to be used the same way as its competitors. As the token also exists on Binance as their own stablecoin it can be used for Binance's various services. You can use the token to pay, as collateral for loans & derivates as well as use it in their earn program. The biggest strength behind this coin is the same as USDC. It is backed by one of the most popular exchanges and that carries weight.
Use cases
Most of this is similar or the same as other stablecoins, you use it for trading pairs and storing value. The biggest difference is that is more useful than most other stablecoins on Binance as they want users to adopt their token. It is useful for staking in their earn program or used as a stable fiat substitute in their debit card. Also a very stable and safe way to provide collateral for bigger traders that trade in futures and derivatives. It is still useful on other exchanges & dexes that support the Binance chain or Ethereum. Their fees are also competitive compared to other stablecoins thanks to the standard BSC coins used at Binance.
Binance USD today
The creator company, Binance, has been criticized on many fronts recently but has been able to stay stable, both their crypto and the exchange itself. As more understanding and information comes out regarding Tether there'll be a growing demand for stablecoins. For active Binance users this is a very safe coin to use, any trust you've already placed in Binance warrants this token being a safe choice for weathering dips or trading pairs. I do still recommend taking a look into decentralized alternatives as they are generally safer.
Pros
- Backed by Binance & Paxos, both trusted crypto companies
- Audited monthly
Cons
- Centralized
- Binance has been put under media & regulatory pressure lately