In this article, we will talk about everything concerning ERC20 and BEP20 tokens, how to create them and the difference between them
BEP20 and ERC20 are basically token standards. The ERC20 token standard is a set of guidelines for projects wishing to build on the Ethereum blockchain, whereas the BEP20 token standard is similar to the ERC20 token standard but only applicable to tokens developed on the Binance Smart Chain (BSC).
In this article, we will break down everything you need to know about ERC20 and BEP20 token standards and how you can use them to create your free token.
What Is A Token Standard?
What Is A Token?
A token is a coin that is based on a blockchain that already exists. They are any digitally transferred asset between two people in the Blockchain network.
Companies who want to use these currencies for a specific reason typically create them. However, rather than creating their own blockchains, they merely build on top of existing ones.
Tokens can be native to a blockchain, such as BTC, which is Bitcoin’s native token, or they can be created and hosted on an existing blockchain using a smart contract.
Stablecoins are tokens that track the price of fiat currencies (e.g., USD, EUR). Others, known as NFTs, can be used to represent collectibles or works of art. Finally, tokens can represent ownership rights to real-world properties or businesses (i.e., stock tokens).
Token Standards
Hundreds of decentralized applications (dApps) create tokens on various blockchains, including Ethereum and the Binance Smart Chain.
However, in order for these tokens to interact flawlessly with blockchains, they must adhere to strict standards. These rules are referred to as “token standards.”
Multiple implementations of a standard can exist side by side, but they must all adhere to the standard’s interface and rules.
Standards ensure that smart contracts remain interoperable, so when a new project releases a token, it will work with current decentralized exchanges, wallets, and other services.
A token standard can include rules that govern things like:
- The total supply of the token
- The process of making and destroying new tokens.
- Transaction processes for the token, etc.
These guidelines aid in the prevention of fraud, technological difficulties, and other problems.
Many users prefer Ethereum and Binance-based tokens in recent times most specifically choosing ERC20 and BEP20 tokens.
ERC-20 token creation, for example, is an Ethereum token development standard that makes it simple for developers to create new tokens on the Ethereum network whereas the BEP20 token standard is similar to the ERC20 token standard but only applicable to tokens developed on the Binance Smart Chain (BSC).
For the purpose of this article, we will focus on just the ERC20 and the BEP20 although they are not the only types of token standards available.
The ERC20 Token Standard
The Ethereum blockchain is the most widely used for dApp development, and the ERC20 token standard is the most widely used token standard on the chain.
The ERC20 token standard is a collection of guidelines for projects that want to create tokens on the Ethereum blockchain.
“Ethereum Request for Comment” is abbreviated as “ERC.” All tokens that are made and run on the Ethereum blockchain have to follow the ERC-20 token standard.
Smart contracts on Ethereum are used to make ERC-20 tokens, which can be bought, sold, and traded on exchanges.
If you wish to create a smart contract on the Ethereum blockchain, you must use the ERC20 token standard. Then you can construct your own token using these smart contracts.
The ERC-20 token standard incorporates a wide range of data, including:
- Details of the total token supply
- How the tokens will be transferred
- How the tokens can be withdrawn
- token balance in the account,
- How the tokens will be received
Features Of The ERC20 Token Standard
Every ERC20 coin has a few key characteristics. The following are the main components:
- totalSupply: A feature that shows the total supply of the ERC20 token
- balanceOf: This feature shows the number of tokens held in a specific wallet
- Transfer: The feature enables tokens to be transferred from one user to the other
- transferFrom: This function automates transfers by approved people or contracts. So, you don’t have to make some payments manually
- approve: Limits the number of tokens that a smart contract can withdraw from your balance.
- name: This is used to attach a name to a token (for instance, “Tether”)
- symbol: This is used to attach symbols to tokens (for instance, “USDT”)
- decimal: Sets the number of decimal places that a token can be divided into
Some of the most popular ERC20 tokens include USDT, Ethereum (ETH), Chainlink (LINK), Aave (AAVE), The Sandbox (SAND), and many more.
How To Create An ERC20 Token
However, there are a few things to consider before creating your own ERC-20 token:
- Wallet: First, we need to set up a crypto wallet account.
- Node: Second, we also need to get our hands on a fully functioning blockchain node for the network in question.
- Get Tokens: Third, we need to acquire tokens. Which tokens to obtain depends on the blockchain we are using to develop our ERC-20 token.
Setting Up A Crypto Wallet (MataMask) Account
With over 1,000,000 users, MetaMask is one of the most popular cryptocurrency wallets on the market.
Along with being a wallet that many people use, the platform is also a decentralized web gateway that gives users a safe way to access the dApps in the Ethereum ecosystem. The token is acquired and viewed using MetaMask.
We’ll also need a MetaMask account to store the tokens we’ll use to pay for our token’s deployment cost.
A MetaMask account is easy to set up and only takes a few minutes. We must either download the browser extension or the mobile application to use MetaMask.
Acquire A Blockchain Node
The next step is to purchase a fully functional blockchain node for the network where our token will be deployed. Because this is how our projects interact and communicate with the blockchain, the node is critical.
As a result, nodes are critical since they enable us to send our tokens to the blockchain.
Acquire A Token
Before we can start making our token, we need to get the native token of the blockchain we want to use.
As a result, in order to construct a polygon token, we must first obtain MATIC tokens. But since we’ll be making an ERC-20 token, we’ll need to get Ether, which is Ethereum’s own currency.
The BEP20 Token Standard
BEP-20 is the second most popular crypto token development standard. Many of the new coins are being made with the Binance Smart Chain because it is faster, more efficient, and can work with other chains.
BEP-20 was made as an extension of the ERC-20 standard, so it has all the same features as ERC-20.
It is the Binance Smart Chain’s primary token standard, which means that all tokens on the BSC are automatically based on it.
BEP-20 specifies the procedures for using, transferring, approving, and managing a BEP-20 token.
All BEP-20 tokens are backed by the Binance Smart Chain, which is a network of smart contracts and DApps on the Binance blockchain. The BSC enables developers to create decentralized applications using smart contracts.
Binance’s BSC has recently gained a lot of traction. Because of several concerns with Ethereum, such as delayed transactions and rising costs, more developers have switched to this blockchain.
These developers must follow the BEP20 token standard if they wish to create tokens on the BSC.
Features Of The BEP20 Token Standard
The BEP20 token standard was created in the same way as the ERC20 standard. So, they both have similar features. Every feature that is available on the ERC20 token standard is also available on BEP20.
These last three features (name, symbol, and balance) are not required for ERC20 tokens but are for BEP20 tokens.
Getting the owner of a BEP20 token is also possible.
Many people like Binance Coin (BNB), PancakeSwap (CAKE), and the Quidax Token (QDX).
How To Create A BEP20 Token
A BEP20 token can be created for free without the need to have coding knowledge. This is made possible by some apps and platforms that provide an easy way to create a BEP20 token. One of them is Token Create.
These are the following procedures:
- Go to Token Creation
- Fill out all the details for your token.
- Select ‘Create Token’ and approve the transaction.
First, you can see the link for step one in the Dapp Browser of the Trust Wallet. Take a look at the top right and make sure you are set to the Smart Chain network.
For the second step, you’ll need to give your token a name and a sign. You’ll also need to tell us how many of your tokens there are at the start and how many decimal places each token can be divided into.
There are also further checkmark settings outlined below.
1. Token Burn:
This check lets you know if your tokens can be burned to reduce the number of tokens in the game.
2. Can Mint:
Minting specifies the opposite, whether more tokens can be created to increase the initial supply.
3. Pause:
This check lets you know if your token and all operations related to it can be stopped and started again whenever you need to.
This pausing operation can be used in the case of a software vulnerability or a malicious attack.
Be aware that allowing pausing gives control over pausing and unpausing to whoever is allowed to do so, such as the person who made the token, which may not be ideal in some situations.
4. Blacklist:
Accounts can also be blacklisted if they act maliciously. Depending on the use case, it may be better for some tokens to have this feature turned off.
Like pausing, enabling blacklists gives central authority, which may not be what you want in some situations.
Create Token
Once you select ‘Create Token’, the next interface will show you the fee for the creation. This fee will be in BNB.
The token will be created once you approve this transaction fee.
The Technical Difference Between ERC20 And BEP20
The following things will help you understand the main difference between BEP20 tokens and ERC20 tokens better:
1. Gas Fee
BEP20 is a clear winner when it comes to gas fees. The ERC20 is a close second. BEP20 transactions cost a lot less because BSC uses PoSA (Proof of Stake Authority) to validate blocks.
This means the transaction fee for BEP20 is much lower than for ERC20. At the time of the transaction, ERC20 charges a fee of about $12. BEP20 tokens, on the other hand, don’t cost more than a few cents.
BSC has a value that isn’t as high as Ethereum’s. It costs more to make transactions with ERC20 tokens than it does with BEP20 because users have to pay the gas fees on Ethereum.
2. Block Verification Speed
For both ERC20 and BEP20 tokens, the speed at which transactions or blocks are checked varies a lot.
BEP20 transactions run faster when they use the PoSA block validation method instead of the ERC20 method, which takes a long time to process.
For BSC, it takes about 3 seconds to check a block on the underlying blockchain. For Ethereum, it takes close to 15 seconds to check a block.
There’s a good chance that ERC20 transactions will take less time because Ethereum is going to switch from Proof of Work to Proof of Stake soon.
3. Security
A lot of people aren’t happy with the BSC’s PoSA block validation model because it could be a security risk.
BEP-20 tokens have a lot of advantages, like faster transaction speeds and lower gas fees. When it comes to blocking verification, BSC relies on just 21 chosen validators, while Ethereum has more than 70,000 validators spread out across the network.
People who want to use BSC aren’t sure they can trust it because there aren’t many validators on it.
4. Rules
As we said, the BEP20 token standard has more rules than the ERC20 standard does. In this way, it shows that BEP20 tokens are held to a higher standard than ERC20 tokens are held to.
Summary
- Token standards are rules that a token must follow if it wants to be on a blockchain. These rules are called “token standards.”
- Every blockchain has a standard.
- People use ERC20 because the Ethereum blockchain is so popular. There is also a lot of growth in the Binance Smart Chain, and the BEP20 standard is also getting bigger.
- The BEP20 token standard is based on the ERC20 standard.
- Transactions with BEP20 tokens are faster and cheaper than transactions with ERC20 tokens.
- However, ERC20 tokens are thought to be safer than BEP20 tokens, which are thought to be less safe.
- It’s possible to have BEP20 tokens that look like ERC20 tokens.
