BEP-20 tokens are Binance Smart Chain (BSC) native tokens that are able to execute smart contracts. It’s basically the Binance Smart Chain’s ERC20 token implementation.
The BEP-20 token standard has introduced on the Binance Smart Chain and it expands the common ERC-20 token standard.
A Binance-Based Token Standard
BEP-20 tokens are Binance pegged commodities. This essentially ensures that exchanges, such as Binance.com, that endorse the BEP-20 asset versions can deposits and withdrawals from BEP-20, or vice versa, and these exchanges effectively become the same token as far as operations on the exchange are concerned.
Binance Smart Chain transactions may only occur within Binance Chain nodes.
Tokens, in their simplest form, may be thought of as a sort of contract that specifies how they are used, who may use them, and other rules about their use.
It is compliant with both Ethereum’s ERC-20 and Binance Chain’s BEP-2, owing to its similarities to both of these protocols.
The BEP-20 specification was built for Binance Smart Chain with the purpose of offering a wide set of options for developers to create tokens on.
This may be anything as basic as ownership shares of a company or as complicated as money deposited in a bank vault (i.e., a stablecoin).
Creating a native asset or a BEP-20 token for use on the Binance Smart Chain is fully feasible, as well as pegging tokens from other blockchains to use them on the Binance Smart Chain.
BEP-2 token transactions on Binance Chain are fueled by BNB (like BEP-2 tokens). Because of this, validators have an opportunity to include transactions in the blockchain because they would earn BNB as a reward for their job.
Binance Smart Chain should be used for decentralized implementations that don’t clog the primary chain, whereas the initial chain is designed for incredibly quick trading.
What are ERC-20 Tokens?
The BEP-20 standard is modeled heavily after the ERC-20 Ethereum standard for tokens. An ERC20 token is a blockchain-based currency that retains worth and can be sent and retrieved much like bitcoin, ether, and bitcoin cash.
ERC20 tokens are processed and sent using Ethereum addresses and transfers, and they use gas to pay transaction fees.
The Ethereum token standard, defined as ERC-20, has arisen as the de facto standard for all Ethereum smart contracts and is widely used for enforcing smart contracts for token use. This specification details all the guidelines all Ethereum-based tokens must obey.
In several aspects, ERC-20 tokens are identical to bitcoin, Litecoin, and other cryptocurrencies; the tokens are centered on a database and have meaning.
There are two significant distinctions between ERC-20 tokens and native tokens. One being that instead of being created on their own blockchain, they are issued on the Ethereum network.
At the time of this article, over 200,000 ERC-20 tokens remain on the Ethereum mainnet. ERC-20 plays a key function in Ethereum. It specifies a basic set of guidelines for all Ethereum tokens.
Other guidelines cover the ways through which tokens can be exchanged, the protocols for transfers, how users can obtain access to details on a token, and the overall token availability.
The consequence is that any form of developer, regardless of skill level, would have a much clearer understanding of how a new token will work into the wider Ethereum framework.
This removes the requirement for developers to redo work each time a new token is launched as long as the new token adheres to the regulations. In order to preserve Ethereum tokens’ usability, this enforcement is also expected.
