BEP-20: How it works and why you need to know about it

Once creating your own token seemed like an impossible mission for ordinary developers. You had to either build a new blockchain from scratch or work with a Bitcoin fork. Everything changed with the advent of Ethereum and its revolutionary ERC-20 standard. But the story didn’t end there — soon, a faster and cheaper alternative called BEP-20 based on BNB Smart Chain appeared.

How It All Began

In 2020, Binance launched its own smart contract blockchain — BNB Smart Chain (BSC). This happened precisely when DeFi was gaining explosive popularity. The platform needed a tool to attract developers and users, and it found one.

The BEP-20 standard was introduced — almost a copy of ERC-20, but adapted for BSC. The result? The Binance ecosystem skyrocketed. Today, many call BSC the main competitor to Ethereum, and BEP-20 — a direct rival to ERC-20.

What is BEP-20 Essentially

BEP-20 is simply a set of rules for creating tokens on Binance Smart Chain. Thanks to this standard:

• Developers don’t need to be programming geniuses to create their own token
• The process takes minimal time and resources
• Tokens gain all necessary functions to operate in DeFi applications
• All operations are paid in BNB — the native currency of the chain

BEP-20 tokens are compatible with the smart contract ecosystem, allowing them to work with DEXs, lending protocols, AMMs, and other DeFi tools. Additionally, they are actively used for tokenizing real assets — linking traditional financial instruments to blockchain.

Technical Features of BEP-20

The standard includes four key parameters:

Blacklist (Black List) — the ability to block malicious addresses and prevent them from interacting with the token.

Can Mint — a function for creating new tokens and controlling inflation. Developers can expand supply depending on project logic.

Can Burn — the opposite of Can Mint. Allows burning tokens, reducing their supply and theoretically increasing the price. This is a deflationary mechanism.

Can Pause — an innovative but centralized feature. Pauses all token operations in case of attacks or vulnerabilities. Many in the crypto community are cautious about this, as it involves centralized control.

Top Examples of BEP-20 Tokens

Thousands of BEP-20 tokens operate on Binance Smart Chain. Among the most well-known:

PancakeSwap (CAKE) — the native token of the largest DEX on BSC. Users can purchase CAKE on Binance, directly on PancakeSwap, or on other exchanges.

Autofarm (AUTO) — a popular yield aggregator and DEX. Allows users to optimize staking and earnings.

Both tokens perfectly demonstrate how BEP-20 works in real projects.

BEP-20 and ERC-20: Twins or Different People?

These two standards are incredibly similar because BEP-20 is essentially a copycat of ERC-20. They do the same thing, just on different networks:

• Both manage ownership, transfer, and issuance of tokens
• Both have identical core mechanisms
• They are even compatible with each other thanks to Binance Bridge

When Binance launched Binance Bridge, it became possible to transfer tokens between blockchains. ERC-20 can be easily converted into BEP-20 and vice versa without fees. The process is called bridging and works in both directions.

Therefore, they can confidently be called twin models. Just choose the network based on your needs.

BEP-20 vs BEP-2: What’s the Difference

In the Binance ecosystem, there is another standard — BEP-2. It’s the older brother, operating on BNB Beacon Chain (the first Binance blockchain created for management).

Main differences:

• BEP-2 uses BNB Beacon Chain, while BEP-20 runs on BSC
• BEP-2 is suitable for Binance DEX, BEP-20 — for DeFi and DApps
• Both are compatible and can exchange tokens via Binance Bridge
• Both networks are integrated into a single architecture and use BNB as the main asset

Choosing a blockchain depends on what you need. Interested in DeFi and GameFi? Go with BSC and BEP-20. Need simple token exchange? BNB Beacon Chain with BEP-2 will handle it better.

Wallets for BEP-20: What You Need to Know

BEP-20 Address — simply an address that holds or receives your tokens. All addresses start with “0x” (like on Ethereum and BSC).

Compatible Wallets — tools that support BEP-20 tokens. It’s important that your wallet is compatible specifically with BSC and supports BEP-20.

Important: when sending tokens, always check which network the recipient uses. Sending BEP-20 to an address that only works with ERC-20 is a loss of funds.

BNB Chain Fusion: What’s Next

Binance announced a major upgrade. By April 2024, the two networks (Beacon Chain and BSC) will merge in the BNB Chain Fusion process. This should:

• Increase system security
• Simplify operations and transactions
• Eliminate vulnerabilities in the current architecture

Users have been warned: BEP-2 and BEP-8 tokens must be converted to BEP-20 before April 2024. Late transfers will be limited.

Why This Matters to You

BEP-20 is not just another token standard. It’s a tool that democratized cryptocurrency creation and enabled thousands of projects to launch without huge investments. Compatibility between BEP-20 and ERC-20 shows that the future of crypto isn’t platform wars but collaboration.

And if you plan to work with DeFi on BSC or simply hold assets, understanding how BEP-20 works is a fundamental but essential skill. Choose the right wallet, verify networks when transferring, and stay updated. Web3 is evolving rapidly, and being informed is your main tool.