Binance USD (BUSD/USDT – Trade it here) is a fiat-collateralized stablecoin 1-to-1 pegged to the US dollar. That is to say, Binance USD is designed to maintain a stable market value that allows crypto investors and traders to make convenient investments.
Binance USD Core Features
Accessibility of BUSD
As a stablecoin, BUSD serves as a way for investors to manage their assets and portfolios with a low-volatility asset. It is easy to buy and access through exchanges such as MEXC. Please refer to the last section of the article for more information on “How to buy Binance USD”.
Fiat-Collateral of BUSD
The mechanism for keeping BUSD’s peg is based on the fiat collateralization.With each BUSD in the market circulation, there should be 1 USD in the reserve, while if the user sends their BUSD to Paxos, the BUSD will be burned and the user will receive 1 USD in return. Theoretically speaking, this keeps the supply and reserves at a constant 1:1 ratio. When the price of BUSD, if ever, fluctuates, arbitrageurs should be able to maintain the stability of Binance USD by purchasing the low-price BUSD to decrease the supply, or, vice versa. Then the peg should be able to be restored.
BUSD Use Cases
Here is a brief introduction to several usual use cases of Binance USD and main reasons why BUSD can be useful in certain situations:
Binance USD as Demand for stability
Given that the crypto market is very volatile, investors may seek some less volatile assets and use them as intermediary currency. Similar stablecoins may include USDT, USDC, etc. which are all mainstream tokens with huge trading volume each day in the market. Stablecoins are essential to the crypto market and the entire industry in general. Compared with the mainstream stablecoin USDT, BUSD has a lower trading volume but has gone through, according to the official website, more auditing process and is on the way of building its market trust and reputation.
Convenience of BUSD
When the traders exit an investment, stablecoins such as BUSD, USDT, etc., provides an option for them to lock their profits without converting any of the cryptocurrencies into fiat. Stablecoins that pegged to fiat are also very convenient for traders to calculate and evaluate their investment profits and losses. Fast converts between cryptocurrencies also offer high liquidity for traders.
Arbitrage of Binance USD
BUSD liquidity pools may provide arbitrage opportunities when prices differ between different AMMs. As mentioned earlier, there may also be arbitrage opportunities through purchasing BUSD and cashing it out for fiat.
How to buy BUSD?
You can buy BUSD on MEXC following the steps:
- Search “BUSD” using the search bar to see the available trading pairs. Take BUSD/USDT as an example.
- Scroll down and go to the [Spot] box. Enter the amount of BUSD you want to buy. You can choose from opening a Limit order, a Market order or a Stop-limit order. Take Market order as an example. Click [Buy BUSD] to confirm your order. You will find the purchased BUSD in your Spot Wallet.
Interested in crypto like BUSD?
MEXC lists moonshot and provides access to trading of major crypto coins like BUSD, keep an eye on our listings in Innovation and Assessment zones, as well as major tokens in the Main Zone – we have more great projects to come! Also, visit the hot projects section to find more hot tokes that were listed already. If you would like to know more about crypto trading itself visit MEXC Academy.
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