In crypto everyone knows of Ethereum but not everyone is aware that they’re two different versions when it comes on to Binance.
There is the official Etherum which is headed by Vitalik Buterin.
And then there is Binance, the crypto exchange platform which has its version of Ethereum running its own network.
So What is Binance-Peg Ethereum and Why Is It Necessary?
In simple terms Binance-Peg Ethereum is a smart contract that allows users to convert their Ethereum into Binance Coins (BNB) and vice versa.
The smart contract is pegged to the price of ETH/BNB on the Binance exchange, and allows for near-instant conversion between the two assets.
The contract is designed to be compatible with the ERC20 standard, so that any ERC20 token can be deposited and withdrawn.
The thing is, Etherum runs on the ERC20 network while Binance runs on a different network called BEP2 and BEP20.
So they are technically different.
Binance has peg-tokens for many cryptocurrencies, however the most popular ones are:
- Binance USD
- Tether USD
You can view the full list here.
Binance-Peg tokens are created to represent assets that do not exist on the Binance Chain or Binance Smart Chain. Binance makes sure to lock up these assets and create the Binance-Peg token to represent them.
Is Binance-peg Ethereum the same as Ethereum?
No, Binance-peg Ethereum is not the same as Ethereum. Binance-peg Ethereum is a pegged cryptocurrency that is backed by Ethereum.
Is Etherum (BEP2) the same as the Official Ethereum?
ETH (BEP2) is a representation of ETH on the Binance Chain.
This is because Ethereum is a token that is native to the ERC20 network, and not the Binance Chain (BEP2). ETH (BEP2) allows users to hold and transfer ETH on the Binance Chain.
How do I know that Binance-Peg ETH is actually 1:1 with ETH?
For every Binance-Peg ETH token on the Binance Smart Chain, there is an equivalent amount of ETH stored in a public address by Binance.
You can view Binance’s ‘Proof of Assets’ page to see how much ETH is being kept in reserve for the different versions of ETH (BEP20 and BEP2).
Why transaction fees are lower on Binance Smart Chain compared to the ERC20 network
The Binance Smart Chain uses a Proof of Stake (PoS) consensus mechanism, which is more efficient than the Proof of Work (PoW) mechanism used by the ERC20 network.
This means that transaction fees on the Binance Smart Chain are lower than on the ERC20 network.
Here’s an example of the withdrawal fees on Binance and various crypto exchanges.
However, the ETH team is working on a solution to bring down the fee.
The average gas fee on the Ethereum network has dropped 71% from $42 in April to $12 on May 10th 2022, according to data from CoinMetrics gas fee tracker.
The total number of transactions on the Ethereum network has increased, but the average gas fee has dropped significantly.
Gas fees are the transaction fees required to mint or facilitate a new transaction on the blockchain network.
Important note: If you’re looking to send Binance-Peg ETH instead of ETH, make sure that the wallet or application you’re using supports the BEP20 version of ETH.
If they don’t support BEP20 ETH, then you should only send ETH to that wallet or platform. Otherwise, you could risk losing your funds.
The Easiest Way To Add Binance-Peg Ethereum to Metamask
Adding the Binance-Peg token to your Metamask wallet is a two-step process.
First, you will need to add the Binance Smart Chain (BEP20) network to your Metamask wallet. Second, you will need to add the Binance-Peg token to the Metamask wallet.
Step 1: Go the Chainlist.org
Step 2: Click the button that says “Connect wallet” at the top right, you’ll get a pop dialog box asking for permission. Go ahead and connect.
Step 3: Search for Binace in the search bar and you’ll see the Binance Smart Chain Mainnet. Click the “Add To Metamask” button for it to integrated with your Metamask wallet.
Is it possible to send Binance-Peg Ethereum to Coinbase?
At the moment, Coinbase only supports the ERC20 version of ETH, not the Binance Chain or Binance Smart Chain versions. Therefore, you cannot send the Binance-Peg versions of Ethereum to Coinbase.
Important note: Do not send Binance-Peg Ethereum to your Coinbase wallet, you’ll never be able to recover those tokens again.
Is There A Way to Convert/Swap Binance-Peg Ethereum to Ethereum?
If you want to convert your Binance-Peg Ethereum (ETH) to Ethereum (ETH) on the ERC20 network, you will need to send ETH to a platform that supports both ERC20 and BEP20 versions of ETH.
Here are some reputable platforms that support both Binance-Peg Ethereum and Ethereum:
Here’s how to convert Binance-Peg Ethereum to Ethereum:
- Send ETH to one of these platforms via the BEP20 network.
- Now withdraw ETH from the platform of your using to another wallet aslo supporting the ERC20 network.
Is ETH a BEP20 or ERC20 token?
Binance-Peg ETH is an ETH token that is pegged to the value of ETH.
Binance will hold 1 ETH for every Binance-Peg ETH created. This allows ETH to be used on the Binance Smart Chain (BEP20). Binance-Peg ETH is an ERC20 token and is fully backed by ETH.
This makes it easy to use ETH on the Binance Smart Chain and also allows for easy conversion between the two chains.
How Do I Send Ethereum To Trust Wallet From My Binance Account
Go to Trust wallet, look at the top right corner.
Click the toggle, search for “Binance-peg Etherum BEP20”. Enable that, and you will be able to make transfers.
Is Binance-Peg Ethereum available on Pancakeswap?
Pancakeswap is a decentralized exchange built on the Binance Smart Chain that allows users to trade BEP20 tokens.
The platform is designed to be user-friendly and provides a variety of features to make trading easy and fun. Pancakeswap also has a liquidity pool to provide liquidity for trading pairs.
Pancakeswap will allow you to use Binance-Peg Ethereum on its platform.
Now remember the Ethereum that you’ll be using on Pancakeswap is Binance-Peg Ethereum, and not the official ERC20 version of Ethereum.
This is important to note because ERC20 Ethereum is not compatible with Binance-Peg Ethereum.
How can I convert Binance-Peg Ethereum to Ethereum on Metamask?
Binance-Peg Ethereum cannot be converted to Ethereum on Metamask as Metamask does not support inter-blockchain swaps.
To convert, ETH must be sent from Metamask to a platform that supports both ERC20 and BEP20 versions of ETH.
The Binance-Peg Ethereum makes it very easy to use Ethereum on the Binance Smart Chain, even though its native network is the ERC20 network.
This comes in very handy when you want to use Ethereum-based assets on decentralised exchanges (DEXes) like Pancakeswap or BakerySwap.