Binance Bridged USDT (BSC-USD) is a BEP-20 token on the BNB Smart Chain representing Tether (USDT) bridged by other blockchain networks. Its primary function is to provide users within the BNB Smart Chain ecosystem access to a stablecoin pegged to the value of the US dollar. ^[2]

Overview

BSC-USD is a wrapped version of Tether's USDT stablecoin, specifically designed for use on the BNB Smart Chain (BSC). It functions as a BEP-20 token, adhering to the technical standard for tokens on the BNB Smart Chain, which ensures compatibility with the network's wallets, decentralized applications (dApps), and protocols. BSC-USD allows users to leverage the stability of USDT while benefiting from the lower transaction costs and faster processing speeds characteristic of the BNB Smart Chain compared to networks like Ethereum.

The token's value is intended to maintain a 1:1 peg with the US dollar, mirroring the underlying USDT asset. This peg is maintained through a bridging mechanism where original USDT tokens on other chains are locked, and an equivalent amount of BSC-USD is minted on the BNB Smart Chain. Conversely, when BSC-USD is bridged back to its original chain, it is burned, and the locked USDT is released. BSC-USD supply is dynamic, expanding and contracting based on the volume of USDT being bridged onto or off the BNB Smart Chain. ^{[1] [2]}

Technology

BSC-USD is implemented as a BEP-20 token on the BNB Smart Chain. The BEP-20 standard is a token standard on BSC that extends the ERC-20 standard, adding features for burning, minting, and pausing transactions. This standard ensures interoperability within the BNB Smart Chain ecosystem, allowing BSC-USD to be easily transferred between wallets and integrated into various dApps, including decentralized exchanges (DEXs) and lending platforms.

The core technology enabling BSC-USD is the cross-chain bridging mechanism. This process involves smart contracts on the source chain (e.g., Ethereum) and the BNB Smart Chain. When a user initiates a bridge transfer, the original USDT tokens are deposited and locked by a smart contract on the source chain. Subsequently, a corresponding amount of BSC-USD tokens is minted on the BNB Smart Chain and sent to the user's BSC wallet. The reverse process, bridging BSC-USD back to the source chain, involves burning the BSC-USD tokens on BSC and unlocking the original USDT tokens on the source chain. Bridge providers facilitate this process. ^[1]

Use Cases

BSC-USD is primarily used within the BNB Smart Chain as a stable, dollar-pegged asset. It functions as a base or quote currency for trading on decentralized exchanges and is commonly used in decentralized finance applications. These include lending, liquidity provision, and yield farming, where users can allocate BSC-USD to generate returns. Additionally, its compatibility with the BNB Smart Chain allows it to be used for low-cost, fast payments and cross-border transfers. ^[1]

Tokenomics

BSC-USD does not have a fixed supply or a traditional token distribution model like an initial coin offering (ICO). Its supply is dynamic and directly tied to the amount of USDT that has been bridged onto the BNB Smart Chain. ^[2]