In the early days of cryptocurrencies, creating a new token was a complex task. It required building an entirely new blockchain or forking Bitcoin. However, this landscape changed significantly with the advent of Ethereum, which repurposed blockchain technology as a development platform.
The subsequent introduction of the ERC-20 token model offered a foundational framework for developing new crypto tokens. As the crypto ecosystem matured, innovative projects emerged, boasting tailored blockchain technologies. One such venture is the BNB Smart Chain (BSC), which introduced its own token standard—BEP-20.
This guide explores the nuances of the BEP-20 token, detailing its features and comparing it with the established ERC-20 model.
Key Takeaways
- Developing a new cryptocurrency once required a new blockchain or modifying Bitcoin’s blockchain. Ethereum enabled building atop its platform.
- The ERC-20 token model simplified token creation, establishing a widely adopted foundational framework.
- BNB Smart Chain (BSC) facilitates token creation within Binance’s ecosystem, mirroring Ethereum’s ERC-20 to enhance DeFi market competitiveness.
- BEP-20 tokens functionally resemble ERC-20 tokens within their respective networks.
- The upcoming BNB Chain Fusion aims to merge Binance’s dual chains, improving security and efficiency while streamlining blockchain operations.
What is BEP-20?
BEP-20 is a token standard on the BNB Smart Chain (BSC), formerly known as Binance Smart Chain. It serves as BSC’s equivalent to Ethereum’s ERC-20, ensuring cross-compatibility between the two. The BEP-20 standard allows users to effortlessly create new tokens on BSC, requiring minimal programming expertise.
Developers can bypass building a blockchain from scratch or relying solely on Ethereum’s token standards. BEP-20 tokens support utility tokens, DeFi projects, and asset tokenization—bridging traditional and digital finance. Transactions involving BEP-20 tokens are paid in BNB, the native token of the BNB Beacon Chain (formerly Binance Chain).
👉 Discover how BEP-20 tokens enhance DeFi ecosystems
What is BSC?
Launched in September 2020, BNB Smart Chain (BSC) is Binance’s second blockchain, designed to capitalize on the booming DeFi sector. It supports smart contracts, enabling decentralized applications (DApps), GameFi, and metaverse projects. Many regard BSC as Ethereum’s foremost rival, with BEP-20 positioned as a competitor to ERC-20.
BEP-20 Token Parameters
BEP-20’s performance is governed by several parameters:
- Blacklist: Blocks malicious addresses.
- Can Mint: Inflates supply by minting additional tokens.
- Can Burn: Deflates supply by burning tokens.
- Can Pause: Halts token operations during attacks or downtime—a centralized feature uncommon in crypto.
Examples of BEP-20 Tokens
Popular BEP-20 tokens include:
- PancakeSwap (CAKE): Native token of BSC’s largest DEX.
- Autofarm: A leading yield aggregator on BSC.
These tokens are available on Binance Exchange, Binance DEX, and PancakeSwap.
BEP-20 vs. ERC-20
Both standards share core functionalities:
- Purpose: Serve as foundational token models.
- Elements: Include ownership, transfer, and issuance mechanisms.
- Interoperability: Binance Bridge enables seamless conversion between ERC-20 and BEP-20 tokens via Peg-in/Peg-out processes.
Despite operating on different networks, their compatibility renders them "twin models."
BEP-20 vs. BEP-2
- BEP-2: Token standard on BNB Beacon Chain (original Binance Chain) for governance.
- BEP-20: Standard on BSC for development.
Both chains interoperate via Binance Bridge, allowing token conversions. BSC caters to DeFi and DApps, while BNB Beacon Chain supports Binance DEX.
BNB Chain Fusion
Announced in January 2024, BNB Chain Fusion merges BEP-2 and BEP-20 into a unified system by April 2024. This upgrade enhances security and efficiency, requiring users to convert BEP-2/BEP-8 tokens to BEP-20. Late transfers will be supported via CLI.
👉 Learn more about blockchain interoperability
Final Thoughts
BEP-20 mirrors Ethereum’s ERC-20 in functionality, fostering cross-chain compatibility. While Binance and Ethereum ecosystems compete, Web3’s future hinges on interconnected innovation. Token standards like BEP-20 and ERC-20 are pivotal in shaping this collaborative landscape.
FAQs
What is a BEP-20 address?
A BEP-20 address holds tokens on BSC, distinguishable by its "0x" prefix (similar to Ethereum). Always specify the network when receiving tokens.