What Is BEP-20?
BEP-20 is a Binance Smart Chain token standard that extends the most common Ethereum token standard, ERC-20. The BEP-20 standard improves on the ERC-20 standard by optimizing speed and transaction cost.
BEP-20 is a token standard for creating tokens or currencies on the Binance Smart Chain. In essence, it allows developers to launch different tokens on the network. Like other token standards, BEP-20 outlines how tokens are spent and other rules for their usage. In many ways, the BEP-20 standard is similar to Ethereum’s ERC-20 standard because it is a modification of the ERC-20 standard. However, in other ways, the BEP-20 expands on the ERC-20.
The first blockchain to implement a versatile smart contract and decentralized app functionality was Ethereum. Following its success, other blockchains tried to offer similar or improved functionality. The Binance Smart Chain is one such blockchain. Its goal is to provide a flexible format for developers to launch different tokens. BEP-20 sets the rules all tokens created on the Binance Smart Chain need to follow.
Developers building a token or currency on the Binance Smart Chain can take advantage of the following benefits:
- BEP-20 tokens are compatible with ERC-20 platforms.
- Gas fees on the Binance Smart Chain are almost 20 times lower than Ethereum.
- The Binance Smart Chain uses the Proof of Staked Authority (PoSA) consensus mechanism, not having scalability issues.
- The blockchain prioritizes speed and is capable of producing a new block every 3 seconds.
- Tokens from other blockchains can be pegged on the BEP-20 token.
- Many crypto wallets support BEP-20 tokens.
When using the Binance Smart Chain network, users need to pay gas fees using BNB. Compared to ERC-20 tokens, gas fees for BEP-20 tokens are much lower.
Several projects and tokens are using the BEP-20 standard. Some examples are:
PancakeSwap (CAKE): It is the biggest decentralized exchange on the Binance Smart Chain. The dApp allows millions of users to swap BEP-20 tokens.
Binance Coin (BNB): It powers the Binance exchange platform, the largest crypto exchange in the world in terms of daily trading volume. Binance users pay trading and transaction fees with BNB.
Binance USD (BUSD): It is a stable coin with its value pegged to the US dollars.« Back to Glossary Index