BEP2 Vs BEP20- Key Differences
BEP2 and BEP20 are the two popular token standards of the Binance blockchain. Binance is regarded as the biggest crypto exchange in the world of cryptocurrencies and as of 2021, Binance registered a trading volume of $9.5 million. Moreover, Binance also features a unique blockchain network with two exclusive parallel blockchains, that is the Binance Chain and the Binance Smart chain (BSC).
This is where we can see the conflict between BEP2 and BEP20 tokens, as they are the native tokens of Binance Chain and Binance Smart Chain. Therefore, it is extremely vital to know about the differences betwixt BEP2 and BEP20 token standards, especially focussed on their functionalities.
From this article by ChainTechSource, you will get an overall idea of the significant disparities between BEP2 and BEP20 tokens with a comprehensive guide on the foundations for their differences. As a matter of fact, having a detailed idea of the Binance Chain and Binance Smart Chain will help you to figure out the difference between their native tokens in a better way.
What is BEP2?
It is obvious that gathering knowledge on their differences in the definition itself will help us to understand the major difference between them both. Predominantly, it is important to take into consideration the token BEP2, which is the fundamental token standard for the Binance native coin or BNB. On the Binance crypto exchange the standard token format functioned for every transaction. BEP2 token standard was initially introduced for use on centralized and decentralized exchanges.
Nevertheless, the standard token format for BNB had certain restrictions for using BEP2 tokens in any other blockchain other than Binance. Hence, it is only possible to use BEP2 However, the token holders can transform BEP2 tokens into BEP20 tokens for other applications in other Binance landscapes.
Binance Chain and BEP2
BEP2 tokens are an important part of the Binance Chain as the fundamental blockchain network by Binance. The Binance Chain is catered as the core of the Binance decentralized exchange, prioritizing processing decentralized crypto transactions.
Binance Chain can work in coordination with the whole Binance ecosystem together with the opportunity for interactions with Binance Smart Chain. Alternatively, it has to keep in mind that Binance Chain, for executing smart contracts does not offer support. It is not possible to build a dApps ecosystem with Binance Chain. Above all that, Binance Chain employs the Proof of Work consensus mechanism approximately similar to Bitcoin.
A Brief about BEP20
The most notable feature of the BEP20 token standard is the inspiration from the Ethereum ERC20 token standard. BEP20 token standard encompasses several similarities to the ERC20 token standard and provides compatibility with Ethereum smart contracts. Apparently, BEP20 takes a dominant role in the BEP20 vs BEP2 comparison by facilitating compatibility with the Ethereum Virtual Machine. Besides, another important feature of BEP20 tokens is interoperability, therefore effortless transferring of BEP20 tokens to BEP2 tokens.
Indisputably, the BEP2 to BEP20 platform caters as an imperative tool for converting BEP2 tokens into ERC20 compatible tokens for integrating with other blockchain networks. The primary aim behind the origins of BEP20 fundamentally prioritizes all the transaction requirements for different decentralized applications on the Binance Smart Chain.
Binance Smart Chain and BEP20
The pointers in the difference between BEP2 and BEP20 would obviously resolve around Binance Chain and BSC. The Binance Smart Chain evolved as a result of the tremendous popularity of Ethereum and the related dApps ecosystem.
Furthermore, new potential fields in the paradigm of decentralization like NFT, crypto games, and NFTs have been one of the major aspects that leads Binance to come up with BSC. As Binance can support all these activities, then it is indispensable to have a blockchain network that can comprehensively support smart contracts.
Even though Binance Chain seemed to be a preferred suggestion, it was not efficient for Smart contracts or complex programming language. Hence, Binance Smart Chain emerged as a preferred solution to the drawbacks of Binance Chain. The Binance Smart Chain utilizes the Proof of Stake Authority or PoSA consensus algorithm rather than Proof of Work consensus. Comparison of BEP2 and BEP20
Criteria
BEP2
BEP20
Blockchain network
Binance chain
Binance Smart Chain
Smart contract support
For batch transfers, no support
Developed specifically for providing smart contract support in the Binance ecosystem
Token addresses
Initiate with “bnb” and integrate a MEMO.
Start with “x0” like Ethereum wallet addresses.
Ethereum compatibility
No support for transfers to Ethereum.
BEP20 tokens have been designed on the basis of ERC20 tokens and are completely Ethereum-compatible.
Consensus mechanisms
Proof of work
Proof of stake authority
Binance transaction costs
Costs for transactions on the CEX and DEX of Binance.
Binance CEX and DEX transactions are free of transaction fees.
Scalability
Limited support for scalability
Scalability is possible because of the flexibility in determining the number of tokens to be created and burned in order to control the supply of BEP20 tokens.
Conclusion
To summarize, BEP20 wins the argument between BEP2 and BEP20. The original token standard in the Binance ecosystem is without a doubt BEP2. However, BEP20 is the impetus for the adjustment that might make Binance more powerful for the Web3 ecosystem. The future of Binance can be built with BEP20 thanks to its compatibility with Ethereum and support for smart contracts.
