Post
Topic
Board Altcoin Discussion
Merits 2 from 1 user
Re: The problem of wrapped tokens & DEX
by
Mitch
on 20/09/2023, 23:19:24 UTC
⭐ Merited by Apocollapse (2)
wrapped tokens are "pegged" not bridged

bridges are sub networks/systems(not tokens themselves) that allow value of multiple mainnet pegged tokens to transfer together on that one bridge network that transfers between different mainnets

pegged token = value vehicle
bridge = transport network
Wrapped tokens are "pegged", I totally agree.
But pegged by who?
My answer is "pegged by the bridge".

For example USDT.BSC is USDT pegged by Binance.
Binance act as the main bridge, you give them real USDT issued by Tether in some other network, they give you wrapped USDT.BSC.
And what is realy important, they do it in both directions, for now.

And right now many other bridges can help you transfer USDT from other networks to BSC and back.
Now all these bridges work like a transport system.

Now imagine that Binance goes to bakrutsy, CS goes to jail, as it happens with FTX.
In the blink of an eye all bridges stop accepting USDT.BSC.
Because bridges are not transport system, they are specialized exchanges.