The cryptocurrency market is expansive, dynamic, and filled with new tokens popping up every other week. In fact, there are so many different tokens out there that it can be hard to keep track of them all.
But between a token standard as BEP2 vs BEP20 vs ERC20, what’s the difference? This article will explain everything you need to know about these blockchain tokens. Read on to get insider information on the potential uses of tokens, how they are different from coins, and which are the best examples currently available.
It is important to understand that a token standard is not the same as a token itself, though many people use the terms interchangeably. Tokens are digital currencies inside a blockchain network that serve various functions and are frequently unique to an application. Some of the purposes they perform include:
- Obtaining digital assets, such as collectibles and gaming credits
- Acquiring voting rights on various platforms
- Facilitating transactions along blockchains, like paying or receiving payments
- Investing assets
A token standard is a set of rules that outlines how a token will function on a particular network. It can include technical specifications, such as the programming language used to operate the token, as well as business rules, such as the specific functions of the token within the network.
Token standards help set forth rules that define how tokens are named and formatted. They are important for ensuring that tokens can be exchanged and understood by all parties involved.
There are three primary token standards: BEP2, BEP20, and ERC20.
BEP-2 was developed by Binance to serve as a blockchain that primarily enables faster asset transfers for their users. It serves as a technological benchmark for creating and using Binance Chain tokens. These tokens abide by a set of guidelines in order to operate inside the Binance Chain ecosystem.
Top 5 BEP2 Tokens
The following are the top five BEP2 tokens identified by Market Cap’s Token Tracker as of 2022:
One of the most famous utility tokens and the cryptocurrency coin supporting BNB chain ecosystem.
A stablecoin launched in 2019 as a result of the partnership between Binance and Paxos, a finance company, in New York
- BEP2 USDD (USDD)
A native stablecoin bolted to USD and backed by TRON’s native currency, TRX, and BTC
An Ethereum token governing chain protocol and is used for discounts and premium access on Sequence
Highly scalable blockchain platform that supports crypto dApps and DeFi among other applications.
What is BEP20
BEP-20 was created with the intention of giving developers a flexible framework to introduce a variety of different tokens to the platform users. These tokens might stand in for anything, from cash kept in a bank vault to stock in a company. It functions as a set of guidelines for tokens, defining things like who can use them and how they can be spent. Additionally, this blockchain contains a BEP20 Wallet feature that supports the BEP20 token standard, making it possible for anyone to use the BSC to deploy digital currency
Top 5 BEP20 Tokens
The following are the top five BEP20 tokens identified by Market Cap’s Token Tracker as of 2022:
- Binance-Peg Ethereum Token (ETH)
ETH token existing on BSC
- Binance-Peg BSC-USD (BSC-USD)
A token whose activities are based on other crypto’s blockchains, such as the EOS Blockchain
- Binance-Peg USD Coin (USDC)
A stablecoin bolted to USD and minted on Ethereum. It is backed by fiat and other forms of reserved assets
A token that permits the utilization of BSC by other applications
- Binance-Peg XRP Token (XRP)
A clone of XRP and a derivative product of Binance
What is ERC20?
ERC20 refers to the technical specification for fungible tokens produced on the Ethereum blockchain. As a fungible token, it can be used and can be exchanged for another token within smart contracts.
Some popular digital currencies that use ERC-20 are:
An altcoin featuring a Japanese breed of dog and is known to be the “Dogecoin killer” because widely used as an alternative to Dogecoin
One of the first stablecoins that used fiat currency (US Dollar)
A massive decentralized exchange allowing users to trade crypto with no centralized third party
BEP2 vs BEP20 vs ERC20: What is the best?
BEP2 vs BEP20
We remember Binance because it has proven itself as one of the most popular crypto exchange platforms with nearly 100 million registered users. However, you may be confused with Binance Chain and Binance Smart Chain. Let’s take a look at their definitions.
Under the newly renamed BNB Chain umbrella, the Binance Chain–where staking and voting take place (BNB Chain Governance)–has changed its name to BNB Beacon Chain. Meanwhile, the Binance Smart Chain, sometimes called BSC, is a multi-blockchain platform supporting the EVM. Its name is simply BNB Smart Chain.
While the Binance Chain on Binance Beacon Chain is a BEP2 token standard, the Binance Chain on VeChain is a BEP20 token standard. Binance Chain on the Beacon Chain is currently moving to Binance Chain on the VeChain network (Binance Chain on VeChain). Once this transition is complete, Binance Chain will be a BEP20 token standard, and all BEP20 tokens will be built on this network.
Difference Between BEP2 and BEP20
What do you know about BEP2 and BEP20? You might be confused as to what is BEP-2 and how it differs from BEP-20.
Well, these protocols are the foundation of a secure digital identity, which is why we see them appear in various decentralized systems. They are two different technical standards that allow users to manage their digital identity with ease while protecting their personal information at the same time.
Check the table below to understand further how the BEP2 and BEP20 are distinct. It will help you understand the key differences between these two identity protocols to assist you in choosing which is right for your needs.
|Purpose||Tokenization standard by Binance to guarantee that cryptocurrencies will integrate with one another more easily and seamlessly||BSC token standard extending ERC-20|
|Blockchain Network||Binance Chain||Binance Smart Chain|
|Etherium Compatability||Tokens are unable to operate in an Ethereum-based setting||Compatible and adheres to the Ethereum ERC-20 token specification|
|Consensus Mechanism||Proof of Work (PoW)||Proof of Stake Authority (PoSA)|
|Gas Fees||Demands Transaction Fees for Binance CEX and DEX||Does not have transaction fees for Binance CEX and DEX transactions|
|Scalability||Limited support||Flexible for deciding the number of tokens minted and burned|
BEP20 vs ERC20
One other major difference between BEP2 and BEP20 is that BEP20 tokens must also meet a specific standard of specifications, while BEP2 tokens do not. In other words, if you create a BEP20 token, you have to meet certain criteria that BEP2 tokens do not.
Only on its native blockchains–BC and BNB–may BNB coins in BEP2 format be utilized as transaction fees. These BEP2 coins can be changed into BEP20 tokens for more widespread use.
BEP20 and ERC20 have similar functions such as:
- Identifying how tokens are sent to or from a specific address
- Recognizing the total token supply
- Showing total token balance
- Defining the conditions under which repeated withdrawals from a single address are allowed, including its limitations
However, BEP20 has additional purposes, namely:
- Specifying token name, symbol, and owner’s address
- Detailing the number of decimal points for token units
That said, users who want more itemized and specific functions may go on with BEP20. If the specification is not an issue for you, then you may consider ERC20.
BEP20 vs ERC20: Gas Fees
Regarding transaction fees, BEP20 offers lower fees because of the block validation method provided by its consensus mechanism, Proof of Stake Authority. It makes gas fees to cost a few cents.
Meanwhile, ERC20 costs higher gas fees. Every average transaction may cause you more than $10. BEP20 is an option if you want to save, and ERC20 is a choice for you if you want to splurge.
BEP2 tokens are built on the Ethereum blockchain as ERC20 tokens. BEP20 tokens, on the other hand, are built on the Binance network. This means that BEP2 tokens have their own network, while BEP20 tokens are built on top of another network (Binance’s).
BEP20 provides more possibilities for token specifications than ERC20, partly because BEP20 is an expansion of and built upon ERC20. However, there are still more aspects to take into account before selecting between the two.
How do I know if my token is ERC20 or BEP20?
You can identify the difference by looking at how they were built or where they were based. BEP20 tokens are built on BSC, TRC20 tokens are based on the TRON blockchain, and ERC20 tokens are based on the Ethereum blockchain.
Does Trust Wallet support ERC20 and BEP20?
Yes, because Trust Wallet is universal. In fact, many labels it as the best mobile Ethereum wallet because it supports all ERC20, BEP2, and ERC721 coins. Trust Wallet also supports the primary blockchains of the Ethereum ecosystem.