Two of the most common currencies and the standards of the two largest blockchains in the world have a lot in common.
One of the main drivers for the creation of Ethereum, and its subsequent popularity, are the efforts of its developers, such as Vitalik Buterin and Fabian Vogelsteller, who seek to solve the scalability problems with Bitcoin, as well as make interaction with the blockchain accessible. and flexible.
To improve the effectiveness of their chains and the programming process for developers, the two biggest blockchains in the world — Ethereum and Binance Smart Chain — have adopted token guidelines.
Blockchains
Now, in blockchains, there are standard token types and programming schemes that help guide and facilitate the creation of smart contracts without having to rewrite an entire contract from scratch.
An ERC or a BEP are proposals that can become programming standards that ensure new tokens perform basic functions like address retrieval, operability with different wallets, and more.
They are basically flat to help build a token.
These standards come in place of code names like ERC-20, BEP-2, or BEP-20.
Other proposals on different chains can also affect the function of a network, but technical improvements, such as the EIP or BIP, Ethereum, and Bitcoin improvement proposals, respectively, are not the same.
The ERC or BEP standards are a checklist to be used when writing a smart contract rather than software to install.
In this article, we will describe two of the most common token standards across all of crypto and decentralized finance (DeFi): ERC-20 and BEP-20.
The latter is very much a compatible reproduction of the former, each with equal power in their respective chains.
What is the ERC-20 token?
If you bought an NFT or traded a token on Ethereum, you most likely interacted with an ERC-20 token.
These tokens are the standard for most tokens on the Ethereum network. They are easy to use (developers say!), and the flexibility of the code allows for a large number of use cases.
The ERC-20 did not start out as a grand theory. According to Vogelsteller, the idea came from a simple proposal by a few coders looking to synthesize tasks and make token production intuitive.
The ERC-20, created in 2015, is a foundation to help blockchain developers and programmers make their tokens interoperable on the Ethereum chain.
One of the most critical aspects
One of the most critical aspects of the ERC-20 is flexibility. It allows tokens and other software to integrate the same standard to facilitate faster, more effective, and global transactions.
Following these ERC-20 standards keeps protocols aligned with core functions while granting the ability to capitalize on the openness available in Ethereum.
The ERC-20 is listed with six key features that remain consistent.
In “code language,” they are effectively known: balanceOf, total supply, transfer, transferFrom, approval, and allocation.
For the layman, these actions allow you to view account token balances, view total token supply details, show how a user submits a token, and enable auto-send on behalf of the owner, and more.
The standard can be used to develop a variety of different tokens.
From the creation of the most common stablecoins to non-fungible tokens and DeFi assets, the ERC-20 is one of the backbones of all cryptocurrencies.
The original ERC-20 is an important milestone in the history of cryptocurrencies and the blockchain.
It helped a large number of users realize the enormous potential of Ethereum and opened the doors for more networks and blockchains to do the same.
Young and emerging developers can focus their energy on creating new protocols.
A nod to the incredible flexibility of the ERC-20 is the ease with which the standard and scheme can be replicated on a new blockchain like Binance Smart Chain.
What is the BEP-20?
Binance Smart Chain was originally envisioned as an alternative to Ethereum, and compatibility runs deep. The ERC-20 standard was expanded to include the BEP-20 token for the Binance Smart Chain.
The BEP-20 Development Company on the Binance Smart Chain offers programmers and developers the same freedom as the ERC-20 on Ethereum. It provides a developer-friendly framework to assist with the introduction of tokens of all kinds on the Binance Smart Chain.
Like its ERC-20 counterpart, the BEP-20 opens the doors to other software and services.
Unlike the ERC-20, however, the BEP-20 is also interoperable with its companion, the Binance BEP-20.
The two Binance standards, BEP-2 and BEP-20, for Binance Chain and Binance Smart Chain, respectively, are powered by BNB.
The two Binance tokens are compatible and complementary to each other.
BEP-20 and BEP-2 tokens can be traded equally. BEP-20, and the BSC network in general, act as the most decentralized networks in the Binance ecosystem.
The fact that ERC-20 and BEP-20 tokens are not really traded anywhere should not be forgotten. To guarantee that tokens are properly traded, users will require an appropriate asset bridge.
Today, many wallets and exchanges, such as Trust Wallet, MetaMask, and Binance Wallet, allow equal exchanges directly on their platforms.
Always make sure you are making the right trade, or you could lose your funds.
Not all platforms are interoperable. Coinbase is notably incompatible with BEP-20 tokens. Any BEP-20 token sent to a Coinbase wallet will be locked up until further notice.
The first standard tiles, but not the last
The ERC-20 remains the most popular standard token in DeFi. The monumental proposal shows that almost everything in crypto and DeFi should be open for discussion and debate.
The ERC-20 was the first, and it is only the beginning of many symbolic standards.
As Ethereum and Binance push for more deflationary mechanisms within their respective networks, we are sure we will see more innovation.
Both networks recently implemented new token metrics that will speed up changes to the separate networks, but the downstream effects of these implementations have yet to be seen.
These symbolic standards are likely just the beginning.
The capabilities of Ethereum, Binance, and the blockchain, in general, go well beyond the token capabilities seen in ERC-20 and BEP-20.
Each of them has proven to be enormously valuable and is a standard at this time. Simplicity was bold, but so was flexibility.
Hopefully, we continue to see new standards introduced and see that new blockchain standards can mimic the ERC-20 story and usher in new use cases.
Conclusion
In conclusion, the blockchain networks on which ERC-20 and BEP-20 coins are based represent the major distinction between them. While BEP-20 tokens run on the Binance Smart Chain (BSC), ERC-20 tokens run on the Ethereum blockchain.
The decision between ERC-20 and BEP-20 token generator ultimately comes down to a number of variables, including the intended ecosystem and user base, the preferred blockchain platform, development needs, and gas costs. Both token standards offer benefits and drawbacks, and the choice should be made in accordance with the particular requirements and objectives of the project or application.
