What is BEP-20?
BEP acronym stands for “Binance Chain Evolution Proposal”. The preceding number is the unique identifier that differentiates it from other BEP standards, such as BEP2, BEP20, BEP721, and BEP115. BEP-20 is the token standard for creating and deploying all kinds of tokens on the Binance Smart Chain (BSC).
Simply put, it defines a set of rules that all BEP20 tokens launched on the BSC must conform to within the ecosystem. It dictates how the tokens can be spent and who can spend them. The purpose of the BEP20 standard was to provide developers with a programmer-friendly and flexible format for launching tokens on the BNB Smart Chain. It also aimed at optimizing transaction costs and speed.
The standard is basically an extension and modification of ERC-20 token standards. Hence, they share some similarities, such as the transferability requirements, divisibility standards, and how total supply is defined.
For instance, the BNB coin, the platform’s native currency, facilitates the transfers between BEP-20 tokens. It is also used to reward the validators. This is similar to Ethereum’s gas fees model. The BEP20 standard is also fully compatible with the ERC20 standard, enabling cross-chain conversions between BEP2/BEP20 tokens and ERC-20 tokens.
Some popular examples of the BEP20 tokens include Peggy coins, Cake (PancakeSwap token), and BAKE (BakerySwap token).
BEP2 vs BEP20
BEP-2 is the technical standard defining how tokens on the BNB Beacon Chain are implemented and issued. BEP2 and BEP20 operate in parallel with each other and are completely compatible. In addition, the BNB coin – the native currency on both the BSC and Binance Chain, facilitates their operations.
Since the Binance Smart Chain is simply an extension of the Binance Chain, the two are fully interoperable. This enables the seamless swap between BEP2 tokens from the Binance Chain and BEP20 tokens from the BSC.