Binance Smart Chain Evolution Proposal (BEP) is a set of rules used to identify tokens on the BNB Beacon Chain and the BNB Smart Chain (BSC) blockchains; both are independent blockchains running parallel under Binance’s development. Of course, Binance is one of the most prominent names in crypto today, owning a crypto exchange and wallet service in addition to its unique blockchain network.
BEP-2 is the token standard used on the BNB Beacon Chain, and BEP-20 is used on the BNB smart chain network; this article intends to shed light on these token standards and their functions and highlight the differences concerning their foundational blockchains.
What is BEP2?
BEP-2 is a standard that defines a set of rules for issuing and implementing tokens on the “BNB Beacon Chain” ecosystem. BNB beacon Chain (formerly Binance Chain) is the first blockchain to be launched by Binance in 2019 as a blockchain for facilitating decentralized crypto transactions. However, the BNB Beacon chain doesn’t support smart contract execution; hence, dApps and other smart contract functions can’t be executed on it.
What is BEP20?
In order to provide competition for the mother of all smart contract blockchains, Ethereum, Binance created the BNB Smart Chain (BSC) in 2020; BEP-20 is a standard that defines a set of rules for the issuance and implementation of tokens on the BNB Smart Chain (BSC) ecosystem.
From the “smart” inclusion, it is obvious that the BNB Smart Chain supports smart contracts and dApps; it is also designed to be compatible with the Ethereum Virtual Machine (EVM) so that Ethereum developers can easily develop dApps on the BNB smart chain.
Similarities and Differences Between BEP2 and BEP20 token standards
From the face of it, we can see that both token standards are different, just as the BNB Beacon Chain differs from the BNB Smart Chain; however, due to similar development teams, both standards have a lot in common. For example, all fees paid on both networks are paid with Binance Coin (BNB), and both chains run parallel on the BNB Chain.
Differences Between the BEP2 and BEP20 Token Standards
S/N
Criteria
BEP-2
BEP-20
1.
Blockchain Network
BNB Beacon Chain
BNB Smart Chain
2.
Blockchain type
Proof-of-Work (PoW)
Delegated Proof of Stake (DPoS)
3.
Smart contracts and dApps
Not supported
Supported
4.
Address style
“bnb…”
“0x…”
5.
EVM-Compatibility
Not compatible
Compatible
6.
Cost
Relatively Cheap
Costs are of the same range; however, BNB Smart Chain is
cheaper because it doesn’t require transaction fees for transactions on
Binance CEX and DEX
7.
Transaction speed
Slower
Faster
The BEP-20 token standard is the more popular and used one out of both sister chains; its EVM compatibility and smart contract usage made it an early competitor for Ethereum before other “ETH killers” became a thing; however, this doesn’t change the fact that BEP-2 is the original token standard of the Binance Ecosystem.
Since February 2022, Binance Chain and Binance Smart Chain have formed as BNB Chain; hence, the new BNB Chain comprises BNB Beacon Chain (formerly Binance Chain) and BNB Smart Chain (formerly Binance Smart chain). Binance claims that the infrastructural change will help facilitate adoption and build a better ecosystem for Web 3 applications.
With the new infrastructure, it is expected that the BNB Beacon chain will cater to on-chain governance (i.e., staking and voting), while BNB smart chain will remain for smart contracts, EVM compatibility, consensus layers, and multi-chain synchronization. Also, there is a new “BNB sidechain” that uses PoS solutions to develop dApps and custom blockchains with existing BSC functionality.
Final Takeaway
Regardless of their differences, both blockchains are important to the Binance ecosystem; in fact, there is a BEP2-BEP20 Bridge that facilitates interoperability between both chains.
In conclusion, both blockchains and their token standards are equally important for the BNB chain.
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