Binance USD (Ethereum)

BUSD

BUSD is a fully collateralized stablecoin issued by Binance and backed by USD reserves held with a licensed custodian (Paxos).

Risk Rating
Best
$1.00
0.10%
Summary
What we like
Provides easy on-ramp and off-ramp to convert your USD into digital dollars that is backed 1:1 by underlying reserves.
What we like less
Paxos custodies the deposited USD and controls the minting and redemption of BUSD. Open to censorship as Paxos can blacklist any BUSD address at will.
What it means for you
BUSD is a highly liquid instrument to hedge your portfolio in volatile market conditions and also an easy way to put USD to work for you in DeFi.
Information
Blockchain
  • Ethereum
Key Metrics
  • Market Cap: $70.2M
  • Fully Diluted Valluation: $70.2M
  • FDV / MC: 1
  • Ranking inside Exponential (among stables): #16
  • Circulating Supply: 70,511,464
  • Total Supply: 70,511,464
  • Volume (24H): $307.5K
  • ATH: $1.15 (03/13/2020)
  • ATL: $0.90 (05/19/2021)
Risk Assessment
Best
Asset Strength

BUSD is a large-cap, fully collateralized asset. This asset depends on a centralized entity for custody services.

BUSD is a stablecoin that usually trades within 20bps of its peg to USD, which makes it a solid store of value.

Asset Tokenomics

BUSD has a fixed supply. BUSD is backed 1:1 by USD reserves held with a licensed custodian (Paxos). BUSD is fully redeemable for its USD reserves, providing an effective mechanism to retain the peg to $1.

Asset Volatility

BUSD is a stablecoin that usually trades within 20bps of its peg to USD, which makes it a solid store of value. BUSD is fully redeemable for its USD reserves, providing an effective mechanism to retain the peg to $1.

Dependencies

Binance USD (Ethereum) has no dependencies.

Things to know about BUSD

Who invented BUSD?

BUSD launched in September 2019 as a partnership between Binance and Paxos. Customers on Binance with USD accounts can exchange 1 BUSD for 1 USD and vice versa. BUSD is issued soley by Paxos.

How does BUSD work?

BUSD are backed 1:1 by USD reserves held with a licensed custodian (Paxos). The process of minting BUSD tokens involves interacting with Binance contracts which manage the minting and burning of BUSD. This is done when Paxos deposits US dollars into the reserve. The newly minted BUSD tokens are then sent to the customer's wallet. The process for redeeming BUSD for USD is just the reverse process.

How secure is BUSD?

BUSD is a centralized stablecoin that is perceived as safer and more transparent than USDT as its reserve composition only consists of cash and short-term U.S. government bonds. BUSD regularly undergoes audits and publishes monthly reserve reports and attestations that prove the amount of USD reserves are greater than the amount of BUSD in circulation. Nonetheless, BUSD has the ability to "blacklist" any of its associated addresses at will. When a BUSD address is blacklisted, it can no longer receive BUSD and all of the BUSD controlled by the address can no longer be trasnferred on-chain.