What’s the Difference Between ERC-20 and BEP-20?

BEP20 and ERC20 tokens are two names that crypto fans will be familiar with. ERC20 tokens are the name for several of the defi protocol tokens that leverage smart contracts on the Ethereum network. Stable coins like USDT and USDC, Shiba Inu SHIB, and others are very popular. On the other hand, any cryptocurrency token on the BSC blockchain, such Binance USD, Binance BNB, Venus, PancakeSwap, BURGER, C.R.E.A.M., etc., is a BEP-20 token. So, what is the ERC20 standard for tokens? Is it different from the rules for BEP-20 tokens?

How the BEP20 Token Standard Works

The answer to the question “What is BEP20?” is that it is a set of rules for how tokens are made on the Binance Smart Chain. To be interoperable with the network and other tokens, all BSC tokens follow the BEP-20 standard.

The regulations also make it easy for tokens to work smoothly on the network. They also outline how tokens on BSC can be moved, approved, and managed. At the moment, Binance gives out two token standards: BEP20 and BEP2. The first one is for Binance Smart Chain, which is a different network, while the second one is for Binance Chain, which supports the BNB coin.

The BEP2 standard lets the Binance blockchain handle both centralized and decentralized exchange transactions. But it can’t talk to other blockchains. It can talk to BSC, however people who own BEP2 tokens must transform them into BEP20 tokens in order to use them on other Binance platforms.

What is the ERC-20 Tokens Standard?

The technical requirements for making fungible tokens on the Ethereum blockchain are called the ERC20 token standard. Fungible means that the people who own tokens can trade them on the blockchain for other tokens.

Developers of smart contracts and decentralized apps based on Ethereum use this standard to make tokens that make it easy for consumers to interact with their apps. But they have to follow the rules to make sure that the tokens can be traded with other tokens on Ethereum.

Smart contracts make it possible for people to buy, sell, and trade ERC-20 tokens on crypto exchanges. Tether USD (USDT) DAI Stablecoin, Shiba Inu (SHIB), HEX, Maker (MKR), USD Coin (USDC), and many more are popular ERC20 tokens.

BEP20 Vs. ERC20: Which Standard Is Better?

Based on how popular, widespread, and useful Ethereum is over Binance, it could be easy to say that the ERC20 standard is better than the BEP20 standard. But let’s look at them from the following points of view.

Blockchain system

Ethereum is the second largest network in terms of market capitalization, and it has more features than the others. The blockchain has become a place where decentralized financial protocols, NFT tokens, stablecoins, and even meme coins are made.

At the moment, many DeFi initiatives operate on Ethereum, which is used by more than 80% of all decentralized financial projects. Also, 70% of all Non-Fungible Tokens are either being built on Ethereum or use ETH.

Binance Smart Chain also helps numerous projects grow, although it doesn’t have the same reach as Ethereum.

When it comes to gas fees, BEP20 beats both ERC20 and the delegated proof of stake (DPoS) version of the Tron blockchain. The proof of staked authority block validation approach makes it possible for it to have cheaper costs. Transaction fees for users are only a few cents, however the ERC20 blockchain has greater expenses.

Also, it is faster to check blocks on the Binance Smart Chain. After the merge, the process takes 3 seconds on BSC and up to 12 seconds on Ethereum.

When it comes to network security, Ethereum is the victor. Blocks in BSC are checked by 21 validators, but in Ethereum, more than 70,000 validators accomplish the same job. Because of this, a lot of individuals say that BSC is prone to security problems. Analysts generally agree that BSC selected reduced transaction fees above network decentralization and security.

Assistance for the development of smart contracts

Statistics show that developers made 1.45 million smart contract projects on Ethereum in the first quarter of 2022. The number is up 24.7% from what it was in Q4 of 2021, which shows that people are using it more and more. But even if Binance Smart Chain has smart contracts, it is not as good as Ethereum. It depends mostly on Ethereum instead. Also, it is centralized because of the way PoSA makes decisions.

Consensus mechanisms

The proof of staked authority (PoSA) consensus technique is used by the BEP20 network. This way of verifying blocks makes the network faster and more efficient for users.

Now that PoS has replaced PoW, Ethereum is a superior network. PoW used a lot of energy, whereas PoS doesn’t. After Ethereum switched from proof-of-work to proof-of-stake, the average time it took to verify a block went from 15 seconds to 12 seconds.

But even though the speed has gotten a little faster, it still can’t keep up with BSC block time. The network just kept getting better.

Which is superior, BEP20 or ERC20?

BEP20 features a more thorough token specification than ERC20 from a technical point of view. BEP20 should be better than ERC20 because it is an expansion of ERC20 and is based on it. ERC20 is for you if you want a token that is easy to make and can be used all around the world. But choose BEP20 if you want a token with a reduced gas fee and a quicker processing time.