#bstockscis @BinanceCIS
I used to assume that if a bStock's price drifted even slightly from its underlying share, something was technically broken. It isn't — it's just two different order books.
A bStock and its underlying stock exist on two separate venues, with separate buyers, sellers, and available liquidity. The 1:1 backing is a statement about collateral — how many real shares the custodian holds against outstanding tokens — not a promise that both prices update in perfect lockstep every second. Binance publishes that backing on its Proof of Collateral page, which is the thing actually worth checking if you're worried about the peg.
Price convergence and collateral backing are two different questions, and it took me a while to stop conflating them. A gap between the two prices tells you something about liquidity and timing. It doesn't, by itself, tell you anything about whether the token is still fully collateralized.
Which one would you check first if you saw a gap — the order book depth, or the Proof of Collateral page?
I used to assume that if a bStock's price drifted even slightly from its underlying share, something was technically broken. It isn't — it's just two different order books.
A bStock and its underlying stock exist on two separate venues, with separate buyers, sellers, and available liquidity. The 1:1 backing is a statement about collateral — how many real shares the custodian holds against outstanding tokens — not a promise that both prices update in perfect lockstep every second. Binance publishes that backing on its Proof of Collateral page, which is the thing actually worth checking if you're worried about the peg.
Price convergence and collateral backing are two different questions, and it took me a while to stop conflating them. A gap between the two prices tells you something about liquidity and timing. It doesn't, by itself, tell you anything about whether the token is still fully collateralized.
Which one would you check first if you saw a gap — the order book depth, or the Proof of Collateral page?