The Web3 ecosystem flourishes with the emergence of blockchains such as Binance Smart Chain (BSC). While Ethereum was the first attempt at creating an internet computer running smart contracts with ERC20 as its native token, BSC with its BEP20 token standard is growing in popularity as developers have found advantages in creating a BEP20 token on BSC rather than ERC20 tokens on Ethereum. However, you might wonder, “what is BEP20?” or you might already know what BEP20 is and want to create your own BEP20 token right away. Whatever the case might be, in this full Binance Smart Chain token guide, we’ll answer the question “what is BEP20?” and we’ll provide you with a shortcut so you can create a BEP20 token effortlessly.
To build fast, efficient, and engaging projects, you need flexibility. Working with BSC and BEP20 expands the possibilities and enriches your builds with cross-chain or multi-token options. BSC development using Moralis enhances your projects even more, as Moralis makes the development process markedly quicker without compromising quality or security. Moralis’ ultimate Web3 development platform supports your BSC builds through Moralis Speedy Nodes, as well as Moralis’ Price and NFT API!
In this guide, you’ll learn about BEP20 and how it connects to BSC and Binance’s original chain, Binance Chain. Moreover, you’ll get an overview of how Moralis can help you get started on BSC and BEP20 token creation.
BEP Basics – What is BEP20?
BEP20 is the standard for creating tokens on BSC, or using Binance Smart Chain development. Tokens are a valuable component of any blockchain-based system, dApp, platform, or economy. They facilitate the movement of value and help track every activity on the blockchain. In other words, they are key to conducting many kinds of transactions.
The abbreviation “BEP” is short for for “Binance Smart Chain Evolution Proposal”. BEP20 is the token standard created by Binance for Binance Smart Chain, the smart contract platform that runs parallel to the original Binance Chain. We’ll also go through the BEP2 token standard later in this article. Firstly, however, you should understand the background to Binance Smart Chain to fully appreciate it.
What is Binance Smart Chain?
To get a sense of BEP20, let’s first look into Binance Smart Chain’s properties and why it was created. Simply put, Binance Smart Chain, or BSC, is a blockchain made to run smart contracts. It works together or in parallel with Binance Chain, Binance’s first blockchain used on its non-custodial exchange.
Binance Chain was built with one thing in mind: to optimize for fast trading on Binance’s non-custodial platform. Learning from other Ethereum-based projects before it, Binance focused on preventing network congestion in its design. Thus, Binance Chain, by letting go of expanded capabilities, can handle a high transaction throughput without slowing down. Because of this optimization, Binance Chain is not flexible enough to support the launch of a full-fledged DEX (decentralized exchange). Binance realized that they needed to build a new chain specifically to accommodate smart contracts that automate transactions. Therefore, for this purpose, Binance created Binance Smart Chain (BSC). BSC now serves as the foundation for its decentralized exchange or DEX project.
Dual Chain Architecture
Today, Binance adopts a unique dual chain architecture that supports two chains, Binance Chain and Binance Smart Chain. The architecture uses a native token (BNB) to fuel both.
While each chain is independent of the other, this infrastructure operates through a bridge. This bridge makes the chains complementary. This “Binance Bridge”, originally known as the “Panama Project”, uses its own unique mechanics. It utilizes a wrapping technique to move assets across blockchains.
As a complementary infrastructure, BSC operates independently from Binance Chain. It’s a stand-alone chain and not a layer-2 platform. Therefore, if Binance Chain has an issue or goes offline, it remains completely unaffected.
Binance Smart Chain is compatible with the EVM (Ethereum Virtual Machine). Hence, you can port a dApp or use MetaMask to interact with it seamlessly. The consensus algorithm on BSC is currently “PoSA”, which stands for “Proof of Staked Authority” and is a variant of Ethereum’s “PoS” (proof-of-stake) algorithm. It means that validators secure the network by staking BNB coins. How does the network provide incentives for these validators? The network gives them the accumulated transaction fees from every validated block. BNB coin is meant to be deflationary and hence could increase in value as Binance conducts regular coin burns, further reducing its fixed supply. This mechanism provides another incentive for BNB holders.
BEP2 and BEP20
Binance Chain adopts the BEP2 token standard, while Binance Smart Chain uses the BEP20 standard. As mentioned, BNB acts as fuel for both. Therefore, you’ll need to acquire some BNB if you want to transact on either chain.
These token standards are fully compatible. Thus, you can work with them seamlessly as you alternate between chains. When on Binance Chain, you have to work with its native token, BEP2. When on BSC, you need to use BEP20. Therefore, if you are interacting with a dApp, you’ll need to use BEP20 since it’s the smart chain counterpart.
What is the BEP20 Token Standard?
BEP20 is the token standard of Binance Smart Chain. In many ways, it’s similar to Ethereum’s ERC20 standard; in other ways, it expands on it. BEP20 sets rules that all tokens created on BSC need to follow.
The BEP20 token standard on BSC applies to any token that is launched or created on Binance Smart Chain’s platform. Examples of such tokens are utility tokens, stablecoins, and security tokens. Another category of coins, known as “Peggy Coins”, are also built using the BEP20 standard and can be pegged to different assets.
Just as Ethereum has gas fees, BNB pays for the transactions involving BEP20 tokens on Binance Smart Chain’s network.
It’s relatively easy to create a BSC token or BEP20 token, and with a simple online search, you will find several helpful web tutorials on BEP20 token development. However, if you want a quick guide, Moralis’ BEP20 Testnet tutorial is one of the most practical and informative tutorials currently available.
Parameters of the BEP20 Token Standard
If you’re considering creating tokens on BSC, it’s helpful to understand the BEP20 token standard parameters, such as:
- Can Mint – The “Can Mint” parameter is inflationary, and it specifies whether new tokens can be minted to increase the BEP20 supply over time.
- Can Burn – The “Can Burn” parameter is a deflationary one, specifying whether tokens can be burned, thus leading to a decreasing supply over time.
- Blacklist – The “Blacklist” parameter enables you to ban or blacklist malicious addresses.
- Can Pause – The “Can Pause” parameter is useful during malicious attacks or incidents where the platform becomes vulnerable. This specifies whether one can pause all token-associated operations in the event of a malicious attack or compromise of the platform. This parameter is centralized, as the creator or a user address that is given similar authority has the power to freeze operations.
BEP20 vs ERC20
Since BEP20 was designed after ERC20, it’s understandable that they share many similarities, such as these functions:
- The “totalSupply” Function – This function returns the total number of tokens in a smart contract.
- The “balanceOf” Function – Provides information regarding the number of tokens available within a user’s address.
- Name – Adds a human-readable name to the token you are creating.
- Symbol – Creates the ticker symbol for your token.
- Decimal – Sets the divisibility of your token. Therefore, it sets the number of decimal places it can be divided into.
- Transfer – Enables the transfer of tokens among BSC users. It specifically requires that the invoking party also is the owner of the token.
- The “transferFrom” Function – Used to automate transfers by approved persons or approved smart contracts. In this case, you may allow subscriptions or other parties to automatically deduct payments from a wallet or an account.
- Approve – A function that limits the amount or number of tokens withdrawn from your balance by any smart contract.
- Allowance – A function that checks the unspent portion of a transaction after an authorized smart contract has spent a certain amount of your tokens.
BEP20 and ERC20 Key Differences
Some key differences between BEP20 and ERC20 tokens are:
- The function “getOwner” is a unique and required specification only found in BEP20. It returns the owner of a BEP20 token.
- Name, symbol, and decimal functions are optional on ERC20, while they are mandatory on BEP20.
Projects and dApps on Binance Smart Chain
You’re now familiar with Binance Smart Chain’s evolution protocol or BEP20 token standard. In addition, you’ve learned how Binance Smart Chain works relative to Binance Chain and how BEP2 and BEP20 tokens interact with each other and how they interact with BNB.
Binance Smart Chain is a promising chain with a fast-growing user base, increasing transaction volume, and rising TVL (total value locked). Furthermore, developers are also building more dApps on BSC. Note that most of these dApps require connecting to a BEP20 wallet.
With the information obtained herein, you are ready to take the next step by creating your own BEP20 token. However, before we explain how to create a BEP20 token, let’s look at some well-known dApps and projects on Binance Smart Chain.
PancakeSwap is one of the biggest dApp successes on BSC. It’s an AMM, or automated market maker, and is one of the web’s leading DEXs. Its functionality allows users to exchange tokens on BSC. It serves millions of users, tens of millions of trades and has up to $15 billion in TVL at the time of writing this article.
Moreover, PancakeSwap has just introduced its NFT market, which is excellent news for the platform’s fans. Furthermore, if you’re a developer looking to create a DEX on BSC, PancakeSwap should be one of your inspirations.
Autofarm is both a DEX and a yield aggregator. Assets can be used as liquidity and collateral, and vaults execute automated actions on the platform, including compounding yield. This DeFi platform supports MetaMask, Binance Smart Chain or BEP20 wallet, and WalletConnect.
BEP20 Money Market Protocols
If you are interested in money markets, Venus’ protocol should prove to be a useful model. It provides lending and borrowing services, similar to Compound and Aave. The difference is, Venus is built on BSC while the majority of its competitors are Ethereum-based.
Moreover, Venus is an algorithmic-based money market system. Crypto assets can be supplied to the network as collateral. Such collateral can be borrowed by pledging over-collateralized digital assets. The collateral supplied to the market can also be used to borrow other assets and to mint synthetic stablecoins. Venus has two BEP20 tokens: XVS and VAI. XVS is the governance token, while VAI serves as the network’s stablecoin pegged to the US dollar.
Examples of BEP20 Tokens
Furthermore, many BEP20 tokens have already become successes. The top tokens include:
With these platform and token successes in mind, more developers are inspired to build on BSC and create their unique BEP20 tokens. However, keep in mind that building DeFi projects has its own risks. As a creator, you need to consider such risks and mitigate them through careful design.
Build Your Own BEP20 Token
By now, you should be curious about the best way to create a BEP20 token. There are a few efficient ways to do it, but the best way to create a BEP20 token is with Moralis, today’s most comprehensive Web3 operating system.
You’ll need to utilize tools such as Remix and OpenZeppelin, and you also need to have some Solidity skills. Fortunately, smart contract templates are available to use, so a minimal amount of coding is involved. In addition, you need to connect to MetaMask. Moreover, with Moralis as your Web3 platform, that should not be a problem, as it provides a seamless way to authenticate with MetaMask.
Furthermore, with BSC marketplaces starting to create their own NFTs, Moralis can help take your BEP20 or BSC project to the next level with Moralis’ NFT API. Since Moralis is built to be cross-chain, you can easily integrate non-BSC projects or other tokens into your BEP20 or BSC build. On top of enabling you to create BSC dApps, Moralis also helps you create a BSC NFT to list on a BSC marketplace.
Launch a BEP20 Coin on Binance Smart Chain
You’re now ready to create and launch a BEP20 token on Binance Smart Chain. To do so, follow along in the following video as Ivan (from Ivan on Tech and Moralis) explains in a simple way how to build BEP20 tokens:
Moralis makes sure that your BSC and BEP20 token projects are quick, cross-chain compatible, and future-proof. Faced with an evolving blockchain space and Web3 and DeFi projects increasingly becoming more complex and cross-chain, let Moralis’ ultimate Web3 operating system do the heavy lifting for you by taking care of the backend.
What is BEP20? – Full Binance Smart Chain Token Guide Summary
You’re now familiar with what both Binance Smart Chain and BEP20 is. Moreover, you now understand why certain developers choose the BEP20 token standard when developing dApps and projects. Furthermore, BEP2 and BEP20 are standards for their respective chain, such as Binance Chain and Binance Smart Chain. We also looked at essential parameters for the BEP20 token standard and overviewed the differences between BEP20 and ERC20. The BEP20 standard is similar to Ethereum’s ERC20 standard in many ways, but it also expands on it.
In addition, with a brief overview of successful projects, such as PancakeSwap, you’ve gotten inspiration so you can create and launch your own dApp on BSC.
If you already have experience with Solidity and Ethereum, you’ll be glad to know that working with Binance Smart Chain and BEP20 won’t require much of a learning curve. This curve is markedly quicker and more exciting with Moralis, which adds powerful features to your BSC and BEP20 projects.