What is BEP-20? A Guide to Binance Smart Chain Tokens

Key Takeways

• BEP-20 is a token standard on Binance Smart Chain (BSC), extending ERC-20 for interoperability with dApps and exchanges on BSC.
• BEP-20 tokens offer low transaction fees, fast speeds, and fungibility, making them popular for DeFi projects.
• Well-known BEP-20 tokens include BNB, CAKE, USDT, and SafeMoon.
• BEP-20 offers faster and cheaper transactions compared to ERC-20 on Ethereum, making it a cost-effective choice.
• Other token standards like ERC-721 (NFTs) and SPL (Solana) cater to different blockchain needs and use cases.

Overview to BEP-20 and other Token Standards

A token standard in the context of cryptocurrency refers to a set of rules or guidelines that define how tokens on a particular blockchain can behave, interact, and be used. BEP-20 is a token standard on BNB Smart Chain (BSC) that extends ERC-20, the most common Ethereum token standard. These standards ensure that tokens are compatible with various platforms, wallets, and decentralised applications (dApps), allowing for smooth interoperability across the blockchain ecosystem.

BNB also had the BEP-2 standard earlier for its BNB Beacon Chain, however in 2024, BNB Beacon chain sunset, completely shutting down its operation.

In order to understand the contents of this blog, you will need to have basic knowledge of blockchains and its architecture. If not, we suggest you read up Fundamentals of Blockchain Architecture.

Features of BEP-20

The key features of BEP-20:

• Fungibility: BEP-20 tokens are fungible, meaning each token is identical in value and can be exchanged on a one-to-one basis, much like ERC-20 tokens on Ethereum.
• Interoperability: BEP-20 tokens are fully compatible with the BSC ecosystem, meaning they can be used on decentralized exchanges (DEXs) like PancakeSwap, used in DeFi protocols, or integrated into other dApps running on the Binance Smart Chain.
• Lower Transaction Fees: BSC, unlike Ethereum, is known for its low transaction fees and fast block times, which makes BEP-20 tokens attractive for projects aiming to reduce operational costs compared to those on Ethereum.

BEP-20 Technical Specifications

BEP-20 tokens must implement several core functions and events, which ensure proper behavior across the BSC ecosystem.

Basic Functions

BEP-20 token smart contracts support the below functions

• totalSupply(): Returns the total number of tokens in circulation.
• balanceOf(address account): Returns the balance of tokens held by a specific address.
• transfer(address recipient, uint256 amount): Transfers tokens from the caller to a recipient.
• approve(address spender, uint256 amount): Approves a spender to transfer a certain number of tokens.
• allowance(address owner, address spender): Returns the amount of tokens a spender can transfer on behalf of the owner.
• transferFrom(address sender, address recipient, uint256 amount): Transfers tokens from one address to another based on prior approval.

In order to know more about smart contracts and how you can create one on your own contracts on OpenZeppelin check out our article on Smart Contracts 101.

If you are a developer, then you can also check out the in-depth official specification in BNB’s github.

BEP-20 Ecosystem

DApps Supporting BEP-20 Tokens

BEP-20 tokens are supported by various types of DApps.

Decentralised Exchanges (DEXs):

• PancakeSwap
• BakerySwap
• ApeSwap

DeFi Platforms:

• Venus Protocol (lending/borrowing)
• Alpha Homora (leveraged yield farming)

Examples of BEP-20 Tokens

Tokens can be launched on BSC as BEP-20 tokens or certain other ERC-20 or SPL tokens can be pegged to their versions on BEP-20 through bridges or wormholes.

Several popular tokens use the BEP-20 standard, including:

• BNB: Used for trading fee discounts and governance.
• PancakeSwap (CAKE): Token for staking and farming on PancakeSwap.
• Tether (USDT): Stablecoin used for trading and DeFi.
• SafeMoon (SAFEMOON): A token designed for holding rewards and burns.
• Shiba Inu (SHIB): A meme coin on BSC.

Key differences between ERC-20 and BEP-20

Which One to Choose?

• ERC-20 is ideal if you want to deploy your token on the Ethereum network, which has the largest ecosystem and the most established DeFi projects.
• BEP-20 is suitable if you're looking for a more cost-effective and faster alternative, especially when building dApps or tokens within the Binance Smart Chain ecosystem.

Both standards are compatible with each other in the sense that cross-chain bridges allow users to move tokens from one network to another, opening the door for more flexibility in how tokens are used across different blockchains.

💡If you are launching a new token, an ERC-20 or SPL token will bring you more initial liquidity and visibility due to larger community size of Ethereum and Solana. A new token as BEP-20 will make more sense if specifically benefitting from the BNB ecosystem.

Other Notable Token Standards

Token Standards solve for different purposes within a blockchain. For example ERC-721 introduced the standard for NFTs, ERC-1400 introduced a specialised standard for security tokens. Different token standards are required so that different use cases can be built on-chain with rules custom to each use case.

Some important standards are as below

• ERC-20: Common for fungible tokens used in DeFi, exchanges, and other applications.
• ERC-721 and ERC-1155: Used for NFTs with unique or collectible assets.
• TRC-20: A TRON-based standard for fungible tokens.
• ERC-777: A more advanced version of ERC-20 for better functionality.
• SPL: Used on Solana blockchains for efficient token creation.
• ERC-1400: A specialised standard for security tokens.

Summary

BEP-20 tokens offer a powerful and cost-efficient alternative to ERC-20 tokens for developers looking to launch tokens on the Binance Smart Chain. With lower transaction fees and faster speeds, BEP-20 has become a popular choice for DeFi projects and decentralized applications. Whether you choose ERC-20 or BEP-20 depends on your needs and which blockchain ecosystem you prefer. However, the compatibility between both standards ensures that you can move tokens across different chains using cross-chain bridges, providing flexibility and opportunities for developers and users alike.

FAQs

• What is a BEP-20 token?

  BEP-20 is a token standard on Binance Smart Chain (BSC), defining how tokens interact within the BSC ecosystem, similar to ERC-20 on Ethereum.

• How do BEP-20 tokens differ from ERC-20 tokens?

  BEP-20 tokens are faster, cheaper, and run on Binance Smart Chain, whereas ERC-20 tokens are on Ethereum with higher fees and slower transaction speeds.

• What are some examples of BEP-20 tokens?

  Popular BEP-20 tokens include BNB, PancakeSwap (CAKE), Tether (USDT), and SafeMoon.

• Why choose BEP-20 over ERC-20?

  BEP-20 offers lower transaction fees and faster processing times, making it ideal for cost-effective dApp and DeFi development on Binance Smart Chain.

• Can BEP-20 tokens be used across different blockchains?

  Yes, BEP-20 tokens can be transferred across different chains using cross-chain bridges, providing flexibility in token usage.