Differences Between ERC-20 and BEP-20

5tGG...kNBo

27 Oct 2023

ERC-20 and BEP-20 are both token standards that allow developers to create digital tokens on their respective blockchains - Ethereum and Binance Smart Chain. While they share some similarities in their technical implementations, there are some notable differences between ERC-20 and BEP-20 tokens.

What is an ERC-20 Token?

ERC-20 is a technical standard used for smart contracts on the Ethereum blockchain for implementing tokens. ERC stands for Ethereum Request for Comment, and 20 is the proposal identifier.

It provides a standard set of rules and procedures that Ethereum tokens must follow, allowing developers to accurately predict how new tokens will function within the larger Ethereum system. This simplifies and streamlines the process of creating new tokens on Ethereum.

Some key characteristics of ERC-20 tokens include:

Fungibility - Each token unit is exactly the same as all other tokens of the same type. This makes ERC-20 tokens interchangeable for trading, lending, or as a medium of exchange.
Transfers and approvals - ERC-20 tokens can be transferred between accounts and token holders can approve the transfer of tokens via smart contracts.
Rules for token supply - ERC-20 defines specific rules for the initial supply of tokens and how the total supply can be changed.
Balance checks - Tokens balances for a particular account can be checked via the contract.
Event tracking - Token transfers and approvals emit transfer events that allow clients to track transactions.

As ERC-20 is a standardized protocol, it means ERC-20 tokens operate in a predictable way across different Ethereum applications. This allows them to be easily integrated into decentralized apps (dApps) that work with tokens, exchanges, wallets, and more.

Some popular ERC-20 tokens include Chainlink (LINK), USD Coin (USDC), Uniswap (UNI), and more. Most of the top Ethereum tokens follow the ERC-20 standard.

What is a BEP-20 Token?

The Binance Smart Chain (BSC) is a blockchain network built by Binance that runs in parallel to the Binance Chain. BEP-20 is the BSC equivalent of the ERC-20 token standard on Ethereum.

BEP stands for Binance Chain Evolution Proposal. Just like ERC-20, BEP-20 defines a set of rules for creating tokens, how they can be transferred, how transactions are approved, token supply management, and more.

Some key traits of BEP-20 tokens:

Interoperability - BEP-20 tokens can interact with each other and freely exchange value.
Fungibility - Tokens are fully interchangeable.
Irreversibility - Transactions are irreversible once confirmed on the BSC.
Consistency - All valid transactions are included in blocks without censorship.
Token supply logic - BEP-20 implements rules for managing token supply similar to ERC-20.

The BEP-20 standard provides interoperability between tokens issued on Binance Chain (BEP-2) and BSC (BEP-20), allowing them to be swapped 1:1. This connectivity opened up DeFi applications on BSC for trading and lending.

Some popular BEP-20 tokens include Binance USD (BUSD), Safemoon, PancakeSwap (CAKE), Venus (XVS) and more.

Differences Between ERC-20 and BEP-20

While ERC-20 and BEP-20 both offer a standard for creating and managing tokens, there are some key differences between the two token standards:

Blockchain Basis

ERC-20 tokens are based on the Ethereum blockchain. Ethereum was the first blockchain to support token standards.
BEP-20 tokens are based on the Binance Smart Chain. BSC was launched later as a parallel chain to Binance Chain to support smart contracts and Ethereum-like protocols.

Transaction Fees

Transactions fees on Ethereum are generally higher compared to BSC. ERC-20 transfers can cost several dollars in gas fees on Ethereum.
BEP-20 fees are minimal, with most transactions costing a fraction of a penny worth of BNB. BSC was built to support high scalability and faster transactions.

Speed

Ethereum currently supports around 15 transactions per second maximum. Transfer times can be slow during periods of network congestion.
BSC aims to support thousands of transactions per second. BEP-20 transfers often confirm in under 5 seconds.

Smart Contract Support

ERC-20 was created specifically for smart contracts on Ethereum. All tokens must comply with the standard.
BEP-20 provides seamless connectivity between BEP-2 tokens and smart contracts on BSC. But BEP-2 tokens don't necessarily need to be BEP-20 compliant.

Popularity and Adoption

ERC-20 is massively popular with thousands of tokens launched. ERC-20 is supported on most DeFi apps and major exchanges.
BEP-20 adoption is growing rapidly but is currently still behind ERC-20. However, many new DeFi projects are launching on BSC.

Accessibility for Users

High fees on Ethereum currently make ERC-20 tokens inaccessible to users who want to trade or swap tokens in small amounts.
BEP-20 tokens are much more accessible to average users due to negligible transaction fees on BSC.

Minting and Burning

ERC-20 tokens have some small differences in how they implement logic for minting (creating) and burning (destroying) tokens.
BEP-20 uses consistent logic for minting and burning across all tokens.

Naming Convention

ERC-20 tokens are prefixed differently, for example ENJ for Enjin Coin.
BEP-20 tokens are prefixed with the ticker, such as CAKE for PancakeSwap.

Technical Implementation

Under the hood, ERC-20 and BEP-20 have some slight technical differences in their Solidity smart contract code and implementation. For example:

ERC-20 uses Ethereum's transfer() function to move tokens between accounts. BEP-20 uses transferFrom().
ERC-20 allows custom token names, symbols, decimals. BEP-20 does not.
ERC-20 uses allowance() to check spender allowances. BEP-20 has allowance() and increaseAllowance() / decreaseAllowance().
Some minor parameter and event naming differences.

However, both ERC-20 and BEP-20 aim to follow similar logic for transfers, approvals, supply management, balance checks, and more. Both are implemented as Solidity-based smart contracts.

So in summary, while ERC-20 and BEP-20 share the goal of standardizing tokens, they have some technical and functional differences due to targeting different underlying blockchains.

Building an ERC-20 vs BEP-20 Token

If you wanted to create a new token, the process would differ slightly between ERC-20 and BEP-20:

For ERC-20:

Write a smart contract that implements ERC-20 logic and interfaces. Use Solidity.
Deploy the smart contract to the Ethereum blockchain.
Initialize the token's name, symbol, decimals, and starting supply.
List the token on exchanges and DeFi platforms to provide liquidity.

For BEP-20:

Write a BEP-20 compliant smart contract in Solidity.
Deploy the smart contract on Binance Smart Chain.
Mint initial supply and distribute tokens.
Get the token listed on BSC-connected exchanges and apps.
Bridge the tokens over to Ethereum if you want ERC-20 interoperability.

Key Takeaways

ERC-20 and BEP-20 both offer a standard for creating fungible, interoperable tokens in a predictable way.
ERC-20 is native to Ethereum, while BEP-20 is for Binance Smart Chain. This leads to technical differences.
BEP-20 provides faster and cheaper transactions compared to ERC-20 currently.
ERC-20 has much wider adoption and availability on exchanges/wallets. BEP-20 adoption is rapidly growing.
Many new DeFi and crypto projects are launching BEP-20 tokens due to lower fees on BSC.
Users can bridge their tokens between Ethereum and BSC using protocols like Binance Bridge.

ERC-20 and BEP-20 aim to achieve similar goals on different blockchains. Both make it easy for developers to launch feature-rich tokens. The choice between ERC-20 and BEP-20 depends on factors like transaction fees, speed, interoperability needs and platform accessibility for end users. But increasingly both standards are being used side-by-side to maximize availability across Ethereum and BSC.