BEP-2, BEP-20, and ERC-20: Tokens are coins that are developed on top of an existing blockchain. While several blockchains encourage the creation of tokens, each has its own token standard that must be followed in order for a token to be created. For example, ERC-20 token development is an Ethereum Blockchain standard, but BEP-2 and BEP-20 are Binance Chain and Binance Smart Chain token standards, respectively. These standards specify a common set of regulations, including as how a token is transferred, how transactions are validated, how users may access token data, and what the overall token supply is. In a word, these standards give all of the information required for a token.
What is a token standard?
BEP-2, BEP-20, and ERC-20: Tokens are digital units inside a blockchain network that are generally application-specific and are used for things like:
- make transactions
- Value storage
- Acquisition of digital assets, such as game credits
- Access governance/voting rights for the associated platform or application
Hundreds of new decentralized application (DApp) companies launch their own coins on blockchains such as Ethereum and Binance Smart Chain each year. To be interoperable with the underlying blockchain, these tokens must match the platform’s token specifications.
Token standards provide the procedures for creating and deploying new tokens.
Typically, standards contain criteria to define the following:
- The total supply limit of the token
- The Token Minting Process
- token burning process
- The process for transacting with the token
The criteria are intended to aid in the prevention of fraud, technical incompatibilities between tokens, and the issuing of tokens that do not adhere to blockchain principles. The restrictions for total supply and support for the generation of additional tokens, for example, include a possible depreciation of the token’s value.
What are the most important aspects of token development?
These aspects are 5 in number:
Tokens must be created to conform with the ERC20 or BEP-20 specifications, regardless of whether they are ERC20 or BEP tokens.
The maximum number of tokens that may be created must be specified in advance. This ensures token purchasers that the amount of tokens available is restricted.
The token owner has the ability to specify how users may manufacture tokens. They may also halt creating tokens in order to boost the token’s value.
Tokens produced to ERC-20 and BEP-20 specifications may be inscribed as well. This decreases the token supply while increasing the token’s value.
Rights of token owners
Governance powers may be granted to a token owner. These privileges will enable him to vote on token minting and burning.
List of tokens
Token development also include having the tokens published on exchanges.
Let’s take a look at each of these token specifications one by one.
What is BEP2?
BEP-2, BEP-20, and ERC-20: BEP is an abbreviation for Binance Smart Chain Evolution Proposal. The BNB platform uses the BEP2 token standard. The standard specifies the requirements for issuing tokens on this network. Many popular wallets, including Trust Wallet, Ledger Wallets, and Trezor Model T, enable BEP2 token transactions. If you wish to transact using BEP2 tokens, you must pay for the essence, i.e. transaction fees, with BNB coins. The ease of trading between multiple cryptocurrencies in the decentralized exchange (DEX) structure is one of BEP2’s advantages. BEP2 does not, however, allow smart contracts, on which many coins and DApps depend for functioning. Tokens that adhere to this standard have addresses that begin with “bnb136ns6lfw4zs5hg4n85vdthaad7hq5m4gtkgf23.”
What is the BEP20 standard?
BEP-2, BEP-20, and ERC-20: It is a Binance Smart Chain (BSC) native token standard. It serves as an example of how BEP-20 tokens may be utilised. It is an interesting expansion of the ERC-20 token standard and may be used to represent equities or fiat currency. The new blockchain, BSC, was created to work with the Ethereum Virtual Machine (EVM).
This Ethereum technology incorporates smart contracts. BSC uses the BEP20 token standard, which is a general-purpose standard meant to be interoperable with both Ethereum’s BEP2 and ERC20.
BEP20 and BSC have enabled users to have access to a huge and quickly rising number of DApps. BSC quickly became Ethereum’s major competitor for the creation of tokenized DApps a few months after its introduction.
Transactions involving BEP20 tokens, like BEP2, need BNB coins to pay for gas. BEP20 is now supported by eight wallets, including Arkane Wallet and Math Wallet, as well as Trust Wallet and others.
A ” Bridge ” may also be used to conduct transactions between BEP2 and BEP20. This cross-chain service was created to make interoperability between several blockchains, like Ethereum and TRON, easier (TRX).
Benefits of BEP-20 Standards
Here are the advantages that the BEP20 standards offer to the different tokens
- BEP-20 tokens are compatible with BEP-2 and ERC-20 platforms
- These are backed by BNB.
- It supports the function of tokens constructed using the BEP-20 standard for use within the BSC network.
- It can be traded with BEP-2, which is a native token of Binance Chain
- Many wallets support BEP-20 tokens
- Tokens from other blockchains can be pegged to the BEP-20 token. These are known as Peggy pieces.
What is the ERC-20 standard?
BEP-2, BEP-20, and ERC-20: ERC is an abbreviation for Ethereum Request for Comment. To construct and issue a smart contract on the Ethereum blockchain, the ERC-20 token standard must be followed. These smart contracts are then used to create Ethereum currencies or tokenize assets that can be acquired by investors.
Some of the very popular Ethereum tokens are Maker (MKR), Basic Attention Token (BAT), and more.
Functions of the ERC-20 token standard:
- It provides details of the total token supply.
- It provides the owner’s account balance.
- Defines how a specific number of tokens can be transferred to a specific address.
- Defines how an individual can withdraw tokens from an account.
- It also defines how a set number of tokens can be sent from the spender to the owner.
What are the benefits of the ERC20 token system?
- ERC20 token transactions are smooth and fast
- Transaction confirmation is effective
- The risk of breach of contract is reduced
- The implementation of the ERC20 function effectively connects the web client and the token.
BEP20 versus ERC20
BEP-2, BEP-20, and ERC-20: Because BEP20 was created after ERC20, it’s natural that they have numerous commonalities, such as the following:
The function ” totalSupply ” returns the total quantity of tokens in a smart contract.
The ” balanceOf ” function – Returns the quantity of tokens accessible in a user’s address.
Name — Adds a human-readable name to the token.
Symbol — Generates the token’s stock symbol.
Decimal — Determines the token’s divisibility. As a result, it specifies the number of decimal places into which it may be split.
Forwarding — Allows tokens to be sent across BSC users. This specifies that the invoking party must also be the token’s owner.
The “transferFrom” function is used to automate transfers by authorised individuals or smart contracts. In this situation, you may authorise subscribers or other parties to deduct money from a wallet or account automatically.
Approve – A feature that restricts the quantity or number of tokens that any smart contract may remove from your balance.
Allocation – is a feature that confirms the unspent part of a transaction after an approved smart contract spends a specified number of your tokens.
BEP2 vs BEP20 vs ERC20: Which is better?
BEP-2, BEP-20, and ERC-20: BEP20 and ERC20 tokens are far more actively utilised than BEP2 due to the rising popularity of smart contracts and DApps. BEP2 may be of interest to those who desire to trade cryptocurrencies using other currency pairings.
BEP2, on the other hand, will not allow you to enter the rich world of DApps due to its lack of smart contract compatibility. In this regard, the true conflict is between BEP20 and ERC20.
BEP20 vs ERC20: standard specification requirements
BEP-2, BEP-20, and ERC-20: A token standard’s principal goal is to provide parameters, known as functions in the blockchain world, that smart contracts, wallets, and markets utilise when dealing with the token.
ERC20 and BEP20 both have six functionalities that may be assigned to a token.
These functions are used for the following purposes:
- Indicate the total supply of the token
- Viewing the token balance of an address on the network
- Define how tokens are sent to an address
- Define how tokens are sent from an address
- Specify if and how multiple withdrawals from an address are allowed
- Specify limits on the amounts an address can withdraw from another address
BEP20, as a new standard extending ERC20, has four additional functions which respectively specify the following information:
- The name of the token
- The token symbol
- The number of decimal places for a symbolic unit
- The address of the token owner
- In this sense, BEP20 can be described as more precisely specified.
Read more: Decentralized finance: What to know about decentralized finance?
BEP20 vs ERC20: transaction fees (i.e. gas fees)
BEP-2, BEP-20, and ERC-20: BEP-20-based transactions have substantially lower costs than ERC-20 transactions, owing primarily to BSC’s staked Proof of Authority (PoSA) block validation technique. Validating nodes stake a number of BNB coins to validate a transaction under the PoSA mechanism. Validation privileges are granted to the top 21 nodes having the most BNB.
A typical transaction using BEP-20 tokens will most likely cost just a few cents in fees. In contrast, the average ERC20 token transfer cost is around $12. In conclusion, when it comes to gas expenses, BEP20 clearly outperforms ERC20.
BEP-20 vs ERC-20: block verification speed
BEP-2, BEP-20, and ERC-20: BEP20 transactions are also quicker to execute using the PoSA mechanism than ERC-20 transactions. While individual transaction speeds vary, typical block verification periods on the underlying blockchains are roughly 3 seconds for BSC and around 15 seconds for Ethereum. This indicates that a typical BEP-20 transaction will probably process 5 times quicker than a comparable ERC-20 transaction.
The planned conversion from proof-of-work (PoW) to proof-of-stake (PoS) by the end of 2021, on the other hand, is predicted to drastically lower ERC20 transaction execution times.
BEP-20 vs. ERC-20: Token Variety
BEP-2, BEP-20, and ERC-20: With approximately 3,000 DApps, Ethereum is the world’s biggest smart contract network. The overwhelming majority of them are built on the ERC20 protocol. In contrast, BSC now hosts approximately 800 DApps, the great majority of which are BEP20-based. However, BSC’s rapid expansion since its inception has resulted in an increase in the number of BEP-20 projects.
If you want to invest in tokens from more established DApps, ERC-20 tokens may provide you with a broader range of options.
BEP-20 tokens, on the other hand, are a fantastic option for new DApp applications.
BEP-20 vs ERC-20: Platform Security
BEP-2, BEP-20, and ERC-20: While BEP20 tokens have lower gas prices and quicker execution times, BSC’s PoSA validation approach has been challenged for possible security flaws. The biggest concern is regarding the network’s lack of decentralisation when it comes to transaction approval.
For block verification, BSC depends on just 21 carefully chosen validators. In contrast, Ethereum’s network has over 70,000 validators. The limited number of validators on BSC may cause prospective users to lose faith.
In essence, BEP20 tokens provide lower gas prices and faster execution times at the sacrifice of security and decentralisation. ERC20 tokens, on the other hand, may give better piece of mind for someone who is concerned about security.
BEP-2, BEP-20, and ERC-20: The crucial element for the average individual interested in DApps and tokens is that BEP-2, BEP20, and ERC20 relate to the token standards utilised by their separate blockchains. When your wallet offers to transfer tokens using these standards, it simply means that the transaction will be carried out on the platform of your choice — BNB for BEP2, BSC for BEP-20, or Ethereum for ERC-20.
While BEP2 is a good option for DEX-based cryptocurrency trading, it does not enable smart contracts. BEP-20 and ERC-20 allow you to access a wide range of DApps and tokens that use smart contract technology. Technically, the BEP20 standard includes more precise token definition choices than ERC-20, owing to the fact that BEP20 is built on and extends ERC-20.
BEP20’s benefits over ERC-20 include reduced fees and quicker execution times. These benefits, however, may shrink or perhaps vanish when Ethereum switches to the PoS validation paradigm later this year. The benefits of ERC20 over BEP20 include a larger selection of DApps/tokens accessible for this standard, as well as a more secure decentralised verification process.