By definition, tokens are cryptocurrencies that are built using the existing blockchain. While many blockchains support token development, they all have a particular token standard according to which a token is developed. For example, ERC20 token development is a standard of Ethereum Blockchain while BEP-2 and BEP-20 are the token standards of Binance Chain and Binance Smart Chain respectively. These standards define a common list of rules like what is the process of transferring a token, how will the transactions be approved, how can users access the token data, and what will be the total supply of tokens.
BEP-20 Token Standard
It is a native token standard of the Binance Smart Chain. It acts as a blueprint of how the BEP-20 tokens can be utilized. Interestingly, it is an extension of the ERC-20 token standard and can be used to represent shares or fiat.
What are the advantages of BEP-20 Token System?
- BEP-20 tokens are compatible with both BEP-2 and ERC-20 platforms
• These are backed by BNB.
• It supports the function of tokens built using the BEP-20 standard to be used within the BSC network.
• It can be swapped with BEP-2, which is a native token of Binance Chain
• Many wallets support BEP-20 tokens
• Tokens from other blockchains can be pegged on the BEP-20 token. These are known as Peggy coins.
ERC-20 Token standard
Basically, ERC stands for Ethereum Request for Comment. To create and issue a smart contract on the Ethereum blockchain, one must adhere to the ERC-20 token standard. These smart contracts are then used for Ethereum coin development or tokenizing assets that can be bought by the investors.
Functions of ERC-20 token standard:
• It provides details of the total token supply.
• It provides the owner’s account balance.
• It defines how a specific number of tokens can be transferred to a specific address.
• It defines how an individual can withdraw tokens from an account.
• It defines how a set number of tokens can be sent from spender to owner.
What are the advantages of ERC20 Token System?
• ERC20 token transactions are uniform and fast.
• Transaction confirmation is efficient.
• Contract breaking risk is reduced.
• ERC20 function implementation connects the web client and token efficiently.