The Zilliqa project and the decentralized Switcheo exchange will create a “bridge” for the transfer of stablecoin Binance USD (BUSD) and ERC-20 tokens between the Ethereum and Zilliqa blockchains.
The stablecoin BUSD was released by the Binance cryptocurrency exchange in conjunction with the regulated financial organization Paxos Trust, which is engaged not only in the issuance of BUSD, but also in their storage. The stablecoin is pegged to the US dollar and is regulated by the New York State Department of Financial Services (NYDFS).
Zilliqa management reported that the introduction of BUSD involves the creation of a “bridge” between Ethereum and Zilliqa, which will make it easy to transfer assets from one blockchain to another. And we are talking not only about the stabled BUSDcoin, but also about all ERC-20 standard tokens created on the basis of the Zilliqa and Ethereum blockchain.
Several parties will implement this initiative: Paxos will issue the BUSD stablecoins on Ethereum, the Binance cryptocurrency exchange will provide its platform for depositing, trading and withdrawing BUSD, and the decentralized Switcheo exchange will be responsible for the interaction of the Ethereum and Zilliqa networks.
As “bridge operators,” Zilliqa and Switcheo will form the administrative consortium for contract management ZRC-2-BUSD (zBUSD). According to the developers, BUSD stablecoins will be transferred from the Ethereum network to Zilliqa in the form of ZRC-2.
ZBUSD holders will be able to quickly transfer their assets from one network to another with low fees due to the use of two smart contracts. The Ethereum smart contract will allow you to block BUSD, after which the corresponding amount of zBUSD will be automatically created in the Zilliqa network, which will be transferred to the user in the Zilliqa network.
zBUSD will be managed by Zilliqa’s smart contract, controlled by Zilliqa and Switcheo. In addition, zBUSD will be supported by several wallets in the Zilliqa ecosystem: ZilPay, Zillet and Moonlet. If the zBUSD holder wants to transfer them back to the Ethereum network, he will have to burn these assets in Zilliqa (in the second smart contract).
This is necessary in order to release ERC-20 standard tokens previously blocked in the first smart contract. After defrosting the assets, they can be moved to the Ethereum network. The developers plan to launch the solution in the IV quarter of 2020.
Recall that in March, Zilliqa and Switcheo began developing the non-custodial decentralized exchange Zilliqa DEX. In addition, in January, Zilliqa and Binance announced a partnership with the Incognito platform, which allows transactions to be anonymous.