Exploring BEP-20 Token Standard on Binance Smart Chain

Every year, cryptocurrency development services offer new and inventive breakthroughs, particularly in the Decentralized Finance field, that challenge the present system and provide enhancements. The Binance Smart Chain, which is equal to Binance Chain but with incentives and advantages never seen previously in the Decentralized Exchange spectrum, is one such recent breakthrough. The BEP-20 token is the standard token on the Binance Smart Chain (BSC), and it is our current product of interest. Businesses wishing to develop their BEP-20 token-based projects are on the right road since the BEP-20 token offers various advantages that make it a profitable investment.

Binance DEX (Decentralized Exchange) and Binance Chain

Binance is one of the most well-known cryptocurrency exchanges operating in the crypto market today. It boasts a large trading volume for various cryptocurrencies, including Bitcoin, Ethereum, Litecoin, and Altcoin.

Binance has created its blockchain network, Binance Chain, which includes several features. Binance Chain came into existence, particularly for Binance DEX. Its purpose was to make transactions happen faster.

Apart from that, the network-enabled users create trading pairs between two different tokens while also create, transmit, receive, and mint new ones on the chain.

Binance Smart Chain (BSC)

Binance Smart Chain (BSC) is a blockchain network that allows smart contract-based applications to be executed. BSC works in tandem with Binance's native Binance Chain (BC), giving customers the best of both worlds: BC's huge transaction volume and BSC's smart contract capability.

Furthermore, the Ethereum Virtual Machine (EVM) is implemented by Binance Smart Chain, allowing it to run Ethereum-based apps like MetaMask.

The platform aims to make it easier for developers to create decentralized apps (DApps) and for consumers to manage their digital assets across several blockchains with low latency and high capacity.

Because of Ethereum, facing congestion and gas tax difficulties, which have forced developers and stake investors to explore other choices, Binance Smart Chain has gained a lot of popularity in early 2021. By cutting the gas tax from 15 Gwei to 10 Gwei, the BSC community made the network even more enticing to new users as a cost-effective and dependable option.

Also, Read | Binance Smart Chain (BSC) for Smart Contracts Development

What does the BEP-20 Token Standard Entail?

BEP-20 is a Binance Smart Chain token standard that extends ERC-20, the most widely used Ethereum token standard. It functions as a blueprint for tokens, defining how people can use them, who may spend them, and other use constraints. It is interoperable with both Binance Chain-powered BEP-2 and Ethereum-enabled ERC-20 due to its similarities.

BEP-20 came in to use as a technical standard for Binance Smart Chain to allow developers to launch various tokens flexibly. These might be anything from stock in a company to money kept in a bank vault (i.e., a stablecoin). In reality, developers can either develop a local asset like on a BEP-20 token standard, or they can peg tokens from other blockchain platforms to make them work on Binance Smart Chain. This is how “Peggy” coins, which are BEP-20 copies of other crypto assets, are used (such as LINK or XRP). BEP-20 token transfers, like BEP-2 token transfers on Binance Chain, are driven by BNB.  This incentivizes validators to include transactions on the blockchain since they will be paid in BNB as a reward for their efforts.

You may be aware that Binance Smart Chain was conceived as a complement to Binance Chain. Binance Smart Chain caters to decentralized apps without congesting the original chain, which is geared for ultra-fast trading, thanks to the dual chain design. Because of this architecture, cross-chain compatibility was given a lot of thought. As a result, BEP-2 tokens can be exchanged for their BEP-20 counterparts. The Binance Chain Wallet extension may be the simplest way to do so, but other options will surely arise over time.

Also, Read | ERC-20 Token Standard | A Compact Guide to Development

The advantages and benefits of the BEP-20 token are listed below, making it a worthwhile business investment.

• The BEP-20 token is interchangeable with the Binance Chains BEP-2 token and the Ethereum ERC-20 token, allowing it to be used on both platforms.
• BNB is the backer and fueler of the BEP-20 tokens.
• Because traders and users earn BNB as an extra charge, this serves as an incentive for them to continue transacting on the Blockchain.
• BEP-20 allows other currencies in the BSC network to connect with other DeFi protocols, including wallets, decentralized exchanges (DEX), and decentralized applications (dApps).
• BEP-2 tokens can be exchanged for BEP-20 equivalents.
• The BEP-20 coin is supported by wallets like the Trust wallet, allowing users to store and withdraw assets with convenience and accessibility.
• The generation of native tokens based on the BEP-20 token is possible.
• Other blockchain-based tokens can be pegged to the BEP-20 token and used on the Binance Smart Chain. This is referred to as "Peggy Coins," which are just BEP-20 counterparts of other tokens, such as the pegged token.

BEP20 Token Development Features

Quick Transactions

The fact that Binance BEP20 token development enables fast transaction speeds and is extremely scalable is one of the primary advantages.

Transaction Fees are Low

You may let consumers transact your tokens without paying large gas fees like on the Ethereum network by developing a BEP20 token.

Compatibility between Chains

BEP20 coins are compatible with Binance Chain BEP2 coins. Using a basic wallet, you can effortlessly switch between the two networks.

Exchanges are Simple to List on

You may simply list your BEP20 tokens on decentralized exchanges with little effort, allowing for quick token sales.

Also, Read | Smart Contracts Development for DeFi | A Guide for Investors

A Comparison Between ERC-20 and BEP-20 token standard

The BEP-20 and ERC-20 tokens on Ethereum are quite similar. Indeed, BNB (Binance Coin) was an ERC-20 token initially. Later, it transitioned from an ERC-20 token on the Ethereum network to a BEP-2 token on the Binance Chain on April 23rd, 2019.

Binance is also working hard to improve cross-chain interoperability, such as between ERC-20 and BEP-20 tokens. This is part of the Binance Bridge Project, which aims to improve blockchain interoperability. Binance Smart Chain is reasonably easy to integrate with Ethereum tools and dApps since it is compatible with the Ethereum Virtual Machine (EVM). Developers just need to migrate their Ethereum-based projects to the Binance Smart Chain. Furthermore, this implies that programs such as MetaMask may be readily converted to work with Binance Smart Chain.

Consult our cryptocurrency development experts and create your BEP20 token right now.