In the early days of cryptocurrency, creating a new token was a technically demanding process. Developers had to either build an entirely new blockchain or modify the Bitcoin protocol through a fork. This changed when Ethereum repositioned blockchain as a development platform, making token creation more accessible.
The introduction of the ERC-20 token standard provided a foundational and widely adopted blueprint for building new tokens. As the crypto ecosystem grew, new projects emerged with their own specialized blockchains. One of these is the BNB Smart Chain (BSC), which introduced its own token standard: BEP-20.
This guide explores the BEP-20 token standard, detailing its features, use cases, and how it compares to other major standards like ERC-20.
Understanding BEP-20 Tokens
BEP-20 is the primary token standard on the BNB Smart Chain. It serves a similar purpose to Ethereum’s ERC-20, acting as a technical blueprint that defines how tokens are created, managed, and transferred. Thanks to this design, BEP-20 tokens are fully compatible with ERC-20 tokens, allowing for interoperability between the two ecosystems.
This standard simplifies the token creation process, enabling developers to launch new digital assets without building a blockchain from scratch. BEP-20 tokens are often used to create utility tokens, governance tokens, and assets for decentralized applications (DApps). They are also integral to the tokenization of real-world assets, bridging traditional finance with blockchain technology.
All transactions involving BEP-20 tokens use BNB, the native cryptocurrency of the BNB Beacon Chain, for gas fees. These tokens are supported across both the BNB Smart Chain and the BNB Beacon Chain, meaning they can be traded on Binance’s decentralized exchange (DEX) and other supported platforms.
What Is BNB Smart Chain (BSC)?
BNB Smart Chain is a blockchain launched by Binance in September 2020. It was designed to support fast and affordable smart contracts and DApps, making it a strong competitor to Ethereum. BSC enables developers to build a wide range of applications, including those in decentralized finance (DeFi), gaming, and the metaverse.
Many consider BSC one of the largest and most active Ethereum alternatives, with a thriving ecosystem of projects and users.
Key Parameters of the BEP-20 Standard
The BEP-20 standard includes several built-in parameters that enhance token functionality and security:
- Blacklist: Allows token issuers to block specific addresses associated with fraudulent or malicious activity.
- Can Mint: An inflationary function that allows new tokens to be created, increasing the total supply.
- Can Burn: A deflationary mechanism that lets tokens be permanently removed from circulation, often to increase scarcity and value.
- Can Pause: Allows token operations to be temporarily halted in case of emergencies, security threats, or system upgrades. This introduces a degree of centralization but adds a layer of protection.
These parameters provide developers with greater control over token economics and security measures.
Popular BEP-20 Tokens
Many well-known tokens operate on the BEP-20 standard. Some of the most prominent include:
- CAKE: The native token of PancakeSwap, one of the largest decentralized exchanges (DEX) and automated market makers (AMM) in the crypto space.
- AUTO: The governance token of Autofarm, a popular yield optimization platform built on BSC.
These and other BEP-20 tokens are available for trading on platforms like Binance, Binance DEX, and PancakeSwap.
BEP-20 vs. ERC-20: What’s the Difference?
BEP-20 and ERC-20 are functionally very similar. Both standards govern token creation, transfers, and ownership. The main difference lies in the blockchain they operate on: BEP-20 is native to BSC, while ERC-20 is used on Ethereum.
Thanks to cross-chain bridges like the Binance Bridge, users can convert ERC-20 tokens into BEP-20 tokens and vice versa. This process, known as Peg-in, enables seamless interoperability without conversion fees. Tokens moved from Ethereum to BSC become BEP-20 tokens and can interact with BSC-based DApps.
Both standards serve the same essential purpose and are considered complementary rather than strictly competitive.
BEP-20 vs. BEP-2: How Do They Compare?
BEP-2 is the token standard used on the BNB Beacon Chain, Binance’s original blockchain focused on decentralized trading and governance. BEP-20, on the other hand, is used on BSC for smart contracts and DApps.
Although designed for different purposes, the two standards are interoperable. Both use BNB as their native currency, and tokens can be converted between standards using Binance Bridge. This allows users to move assets between the two chains depending on their needs—BEP-2 for trading on Binance DEX and BEP-20 for engaging with DeFi or gaming applications.
What Is BNB Chain Fusion?
BNB Chain Fusion is an initiative by Binance to merge the BNB Beacon Chain (BEP-2) and BNB Smart Chain (BEP-20) into a unified ecosystem. Announced in early 2024, this upgrade aims to improve security, efficiency, and user experience by combining the two chains into a single system.
As part of this transition, users are required to convert BEP-2 and BEP-8 tokens into BEP-20 tokens to ensure compatibility. The fusion is a significant step toward simplifying Binance’s blockchain infrastructure and enhancing cross-chain functionality.
Conclusion
BEP-20 is a versatile and widely adopted token standard that plays a critical role in the BNB Smart Chain ecosystem. While it shares many similarities with Ethereum’s ERC-20, it offers distinct advantages in terms of speed, cost, and interoperability within the Binance network.
As the blockchain industry continues to evolve, compatibility between different standards and chains will become increasingly important. BEP-20 represents a key building block in the larger movement toward an interconnected and accessible digital economy.
👉 Explore more about token standards and interoperability
Frequently Asked Questions
What is a BEP-20 address?
A BEP-20 address is a cryptocurrency wallet address that can send, receive, and store BEP-20 tokens. These addresses begin with "0x", similar to Ethereum addresses, so users must take care to select the correct network when transacting.
Is BEP-20 the same as ERC-20?
BEP-20 and ERC-20 are technically similar token standards, but they operate on different blockchains—BSC and Ethereum, respectively. Tokens can be converted between these standards using a cross-chain bridge.
Can I store BEP-20 tokens on any wallet?
Not all wallets support BEP-20 tokens. You need a compatible Web3 wallet that integrates with the BNB Smart Chain. Always verify that your wallet supports the network before transferring tokens.
What was the reason behind creating BEP-20?
BEP-20 was created to offer a scalable and low-cost alternative to Ethereum for token creation and smart contract deployment. It enables faster transactions and lower fees, making it ideal for DeFi and DApp development.
How do I convert BEP-2 tokens to BEP-20?
You can convert BEP-2 tokens to BEP-20 using the Binance Bridge or through supported exchanges. This process is necessary for users looking to engage with applications on the BNB Smart Chain.
Will BNB Chain Fusion affect my BEP-20 tokens?
Existing BEP-20 tokens will remain compatible after BNB Chain Fusion. The upgrade is designed to improve network performance and security without disrupting current token standards.