What is BEP20? Comparison between BEP20 and BEP2 tokens

In order to extend Ethereum's ERC20 token standard, creating a framework and rules that tokens created on BSC must follow, BEP20 was developed. 

Core knowledge: 

  • BEP20 is the token standard on Binance Smart Chain, developed to extend the ERC20 token standard on Ethereum
  • BEP20 and BEP2 both use BNB to pay for transaction fees. 
  • BEP20 differs from BEP2 in wallet address and functionality. In particular, BEP20 is capable of performing more functions than BEP2. 
  • BEP20 tokens can be issued on the FoxCryptoNews Exchange Token Issuer. 

What is BEP20?

BEP20 is the token standard that applies to any token launched or created on Binance Smart Chain (BSC) . These standards regulate how tokens are to be used, by whom, as well as the regulations regarding the use of these tokens. 

BEP20 was developed to extend the execution of ERC20 , the most popular token standard on Ethereum. Due to its similarity to BEP2 and ERC20, BEP20 is compatible with both of these token standards. 

BEP20 allows developers to launch a variety of tokens including utility tokens, security tokens, stablecoins, etc. as native tokens or "peggy coins" - BEP20 versions of other blockchain tokens. As a result, developers can launch cross-chain transaction-enabled dApps like PancakeSwap on BSC quickly and with less congestion. 

Both BEP20 and BEP2 use BNB to pay for transaction fees. 

Difference between BEP20 and BEP2

Wallet address

While BEP20 is the token standard on Binance Smart Chain, BEP2 is the token standard on Binance Chain. Due to this difference, the wallet addresses of the 2 token standards also have a different format. 

difference between bep20 and bep2

BEP20 wallet address starts with “0x…”, similar to Ethereum wallet address . On the other hand, the BEP2 wallet address starts with “bnb…” and requires the use of MEMO (the identity Binance uses to transfer funds to the correct account).

Function

In addition to the wallet address, BEP20 and BEP2 also differ in the function of operation. All in all, BEP20 has more functionality than BEP2, and allows for more frequent trading of Ethereum's ERC20 tokens. 

Specifications of the BEP20 . token standard

Understanding the specifications of the BEP20 token standard is essential if a developer intends to create tokens on BSC. Some typical parameters include: 

  • Mint: This parameter is inflationary, helping to determine if new tokens can be minted to increase supply over time.
  • Burnable: This parameter is deflationary, helping to determine if new tokens can be burned to reduce supply over time.
  • Blacklist : This parameter allows the developer to ban or blacklist malicious and suspected malicious wallet addresses. 
  • Suspendable : This parameter is secure, allowing users to pause all token-related activity in the event of malicious attacks or incidents on the platform. This parameter is also centralized because the creator or user address is given the same permission to freeze operations.

Pros and cons of BEP20

Advantages

  • BEP20 is compatible with BEP2 and ERC20 as Binance Smart Chain supports both Binance Chain and Ethereum blockchain.
  • The platform designed with BEP20 allows for the integration of Proof of Stake and Distributed Proof of Stake.
  • BEP20 is widely used and reliable. Therefore, it is easy for major crypto exchanges to list these tokens.
  • Users can generate tokens with BEP20 at a low cost.
  • Many blockchain wallets support BEP20 tokens, allowing users to receive, store, and transfer BEP20 tokens globally with ease.
  • It is easy for users to issue large amounts of tokens in a short time. 
  • BEP20 tokens are traded quickly, reliably and transparently.
  • BEP2 and BEP20 are both created by Binance, so these tokens can be easily swapped.

Defect

BSC's community governance system allows a small group to manage the community, thus prone to centralization. In addition, BSC is also vulnerable to community attacks, similar to the 51% attacks on the blockchain caused by miners.

Conclusion

BEP20 can be converted into BEP2 and ERC20 compatible tokens via a crosschain bridge, thereby connecting to other blockchain networks. BEP20 is designed to handle all transaction needs across all BSC DApps.

Users can generate Binance Smart Chain BEP20 tokens with the help of simple instructions. As such, BEP20 was an important part of BSC's evolution as a Web3 development tool.


Oct 19, 2022

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