Binance Bridged USDC (BNB Smart Chain) is a representation of the USD Coin (USDC) stablecoin on the BNB Smart Chain. It functions as a dollar-pegged token designed for use within the BNB Chain ecosystem, facilitating transactions and participation in decentralized finance (DeFi) applications with lower fees and faster speeds compared to the Ethereum network where native USDC primarily resides.

Overview

Binance Bridged USDC on BNB Smart Chain is part of the broader trend of bridging established cryptocurrencies, particularly stablecoins, to different blockchain networks. This process allows users to leverage the stability of assets like USDC within ecosystems that offer distinct advantages, such as the lower transaction costs and higher throughput often associated with BNB Smart Chain. The token is created through a bridging mechanism, where native USDC on its original chain (like Ethereum) is locked, and an equivalent amount of Binance Bridged USDC is minted on BNB Smart Chain. Conversely, burning the bridged token on BNB Smart Chain releases the native USDC on the original chain.

The existence of bridged stablecoins like Binance Bridged USDC is significant for cross-chain interoperability and liquidity. It enables users and protocols on BNB Smart Chain to access a widely recognized and utilized stablecoin without needing to directly interact with its native network for every transaction. This integration supports various activities within the BNB Chain DeFi landscape, including trading on decentralized exchanges, providing liquidity, and participating in lending and borrowing protocols. The token aims to maintain a value pegged to the US dollar, backed by reserves held by the issuer of native USDC, Circle.

Technology and Features

Binance Bridged USDC operates as a BEP-20 token on the BNB Smart Chain. The BEP-20 standard is a token standard on BNB Smart Chain that defines rules for tokens, similar to Ethereum's ERC-20 standard. This compatibility allows it to interact seamlessly with wallets, decentralized applications (dApps), and smart contracts built on BNB Smart Chain.

Key technological aspects and features include:

• BEP-20 Standard: Adherence to the BNB Smart Chain token standard ensures broad compatibility within the ecosystem ^[1].
• Bridging Mechanism: The token is created via a cross-chain bridge, which locks native USDC on its source chain and issues an equivalent amount on BNB Smart Chain. This process is managed by Binance, acting as the bridge operator ^[2].
• High Scalability: Leveraging the architecture of BNB Smart Chain, transactions involving Binance Bridged USDC can be processed quickly, even during periods of high network activity ^[2].
• Low Transaction Fees: Transactions on BNB Smart Chain generally incur lower gas fees compared to networks like Ethereum, making transfers and interactions with DeFi protocols more cost-effective ^[2].
• Cross-Chain Compatibility: The bridging process allows for the movement of value between the native USDC chain and BNB Smart Chain, enhancing interoperability ^[2].

Utility and Use Cases

Binance Bridged USDC serves multiple purposes within the BNB Smart Chain ecosystem, primarily centered around providing a stable medium of exchange and value storage.

Primary use cases include:

• Trading: Used as a trading pair on decentralized exchanges (DEXs) on BNB Smart Chain, allowing users to swap between Binance Bridged USDC and other cryptocurrencies ^[3].
• Liquidity Provision: Users can deposit Binance Bridged USDC into liquidity pools on DEXs and other DeFi protocols to earn trading fees or yield farming rewards. This helps reduce slippage for traders ^[2].
• Lending and Borrowing: The token can be used as collateral or borrowed asset on decentralized lending platforms within the BNB Chain ecosystem ^[2].
• Payments and Transfers: Facilitates fast and low-cost transfers of value within the BNB Smart Chain network ^[2].
• Staking: Participation in staking pools that accept stablecoins to earn passive income ^[2].
• NFT Marketplaces: Some NFT marketplaces on BNB Smart Chain may accept stablecoins like Binance Bridged USDC for purchases ^[2].

Tokenomics

As a bridged stablecoin, the tokenomics of Binance Bridged USDC are directly tied to the supply of native USDC on its original chain and the bridging mechanism. The supply on BNB Smart Chain is intended to be backed 1:1 by locked native USDC. Max supply is indefinite (∞), as the supply is dependent on the amount of USDC bridged to BNB Smart Chain ^[3].

The market capitalization is calculated by multiplying the current price by the circulating supply ^[5]. The fully diluted valuation (FDV) is the theoretical market cap if the total supply were in circulation, calculated by multiplying the current price by the total supply ^[6]. For Binance Bridged USDC, the market cap and FDV are approximately equal because the circulating supply is close to the total supply ^{[3] [2]}.

Exchanges and Trading

Binance Bridged USDC is primarily traded on decentralized exchanges (DEXs) operating on the BNB Smart Chain.

Major exchanges and trading pairs include:

• PancakeSwap V3 (BSC) ^[7]
  • ZKJ/USDC ^[3]
  • USDC/WBNB ^[3]
  • BSC-USD/USDC ^[3]
• Uniswap V3 (BSC) ^[8]
  • KOGE/USDC ^[3]
  • BSC-USD/USDC ^[3]
• Uniswap V4 (BSC) ^[9]
  • BSC-USD/USDC ^[3]
• THENA FUSION ^[10]
  • BSC-USD/USDC ^[3]

The price of Binance Bridged USDC is calculated by aggregating data across multiple exchanges and markets using a volume-weighted average formula ^[5].

History and Milestones

Binance introduced bridged USDC to the BNB Smart Chain to enhance stablecoin liquidity and provide users with a low-cost alternative for transacting with a US dollar-pegged asset within the ecosystem ^[2]. This was part of a broader effort by Binance to bridge various assets to its native chain.

Ongoing development includes integrations with various DeFi protocols and potential future enhancements to cross-chain capabilities ^[2].

Security

The security of Binance Bridged USDC relies on several factors: the underlying security of the native USDC stablecoin and its reserves, the security of the bridging mechanism operated by Binance, and the security of the BNB Smart Chain itself.

• USDC Reserves: Native USDC is issued by Circle and is intended to be backed by reserves consisting of cash and short-dated U.S. Treasuries ^[11].
• Bridging Mechanism: The integrity of the bridge is crucial to ensure that bridged tokens are accurately backed by locked native tokens. The specific technical details and audits of the Binance bridging mechanism contribute to its security ^[2].
• BNB Smart Chain Security: BNB Smart Chain utilizes a Proof-of-Stake authority (PoSA) consensus mechanism, relying on validators to secure the network. The token contract for Binance Bridged USDC includes administrative controls, such as the ability to freeze or mint tokens, which are part of its operational security ^[2].

While the token inherits security aspects from its underlying components, users should be aware of the risks associated with bridging assets across different blockchains. ^{[18] [19] [20]}