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- Binance has shifted to a semi-automated process to manage the reserves of its tokens.
- The system ensures that the tokens are pegged correctly, without being mixed with other funds.
- The system is not fully-automated in order to avoid security risks.
The leading crypto exchange Binance has reportedly shifted to a “semi-automated” process with the intention to manage the reserves of the tokens the company issues. The shift is a move towards ensuring that the tokens are pegged correctly which could ensure the proper management of the reserves, when mixed with other company funds.
The news platform Bloomberg shared the updates on Binance’s semi-automated process, stating that the company is “shifting to a semi-automated system for overseeing the reserves that back tokens it issues.”
Notably, the last month, it was identified that Binance had been mistakenly storing the token collateral for almost half of its 94 Binance-peg tokens, simply called the B-tokens, in a single wallet holding $16 billion of funds.
Collin Wu, the Chinese reporter in a thread stated that the newly set-up partially automated process ensures that the B-Tokens are “always transparently backed”:
Binance has now set up a partially-automated process that ensures so-called B-Tokens are “always transparently backed” via a system that only allows minting of new coins to take place after collateral has been added to the appropriate wallet, a spokesperson said on Wednesday.… https://t.co/DmpR65S80N— Wu Blockchain (@WuBlockchain) February 23, 2023
Significantly, a Binance spokesperson told that over the last weeks, the officials have been shifting the collateralized assets to dedicated wallets, making the 1:1 pegging transparent.
In addition, the spokesperson of Binance told that the collateral would be available for withdrawal at any time, stating:
This collateral has always been backing our users’ B-token assets and has always been available for withdrawal at any time. We are now simply showing it on-chain in dedicated wallets where it will remain until it may be required.
Moreover, it has been explained that Binance hasn’t shifted to a fully-automated system, but to a partial-automated system to avoid security risks.
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