ERC20 Vs BEP20: the differences between them

ERC20 Vs BEP20 is the most frequent standards comparison when deciding where to create your tokens. A project can be as scalable and successful as the blockchain where it is created. Each has unique features that are attractive for different purposes.

Do you want to know what are the differences between an ERC-20 and BEP-20 token? Whether you want to trade, create your own cryptocurrency or know the benefits of each standard. Below, you will find the comparison table that summarizes both standards, but read to the end to understand all the details.

What is ERC20

ERC-20 is the token standard in the Ethereum network. Basically, it is the set of rules that every token must comply with to be part of the Ethereum ecosystem. This way, the operability of tokens in DeFis, DEXs, their integration in wallets or dApps can be guaranteed.

On the other hand, although Ethereum is the most successful network with the most users, there are other blockchains based on this network and offering better transaction rates and speeds. Some examples are: Base, Polygon, Arbitrum, Avalanche and Blast. Therefore, ERC-20 is a compatible format with these other blockchains.

What is BEP20

BEP-20 is the standard used by BNB Smart Chain (BSC), the centralized blockchain of Binance, the largest exchange when it comes to cryptocurrencies. As with the ERC20 tokens, it defines the rules for the mint and asset allocation. In this case, BEP20 is ERC20.

Although entirely dependent on Binance validators, BEP20 is a widely used, secure and reliable token standard.

Differences between ERC-20 and BEP-20

Now that you know what BEP-20 and ERC-20 are, it is time to review their most important differences.

Transaction fees

This is one of the most important aspects, as a high gas fee may dissuade buyers from purchasing.

Compatibility

In short, ERC20 and BEP20 can be compatible by bridging the two. This is why many dApps and DeFis operate with both standards equally.

Transaction speed

The speed with which transactions are executed is a fundamental aspect and, in turn, is one of the characteristics where the differences between BEP20 and ERC20 are evident.

Decentralization

The main attraction of blockchains is that they are originally decentralized technologies (not dependent on large companies or banks).

Popularity

More use means more customization, more traffic and the possibility of projects getting more exposure.

Consolidation

The difference between Ethereum and Binance, in terms of their blockchain networks, also lies in how consolidated they are.

Uses

The difference between Ethereum and Binance, in terms of their blockchain networks, also lies in how consolidated they are.

Scalability

In its early days, Ethereum used the Proof of Work to validate its transactions, but it required a lot of computational effort progressively, so scalability was costly and poor. Currently, with Ethereum 2.0, Proof of Stake is being adapted to make the ERC20 standard more scalable.

ERC20 Vs BEP20: Which is better?

Now that we know the main features of each, we can come to a conclusion which token standard is better. Of course, this is completely dependent on your intentions and budget. In short, this is the best standard if:

• You want to operate in a decentralized environment: ERC-20 is the best choice.
• You want to reduce fee payments as much as possible: BEP-20 is better.
• You rate the efficiency of the network for transactions: BEP-20 and BSC have better times.
• You will use tokens in multiple dApps and DeFis: both ERC-20 and BEP-20 are used in all major crypto platforms.
• You prepare for a large project: BEP-20 is especially scalable, but ERC-20 is adapting to Proof of Stake as well.
• You target the technology with the most popularity: Ethereum and its derivative networks are the most widely used.
• You are interested in developing with the best tools and documentation: ERC-20 has more documentation and means for professional development.

Can I send BEP-20 tokens to an ERC-20 wallet or vice versa?

In short, no, it is not possible to send BEP-20 tokens to an ERC-20 wallet or vice versa. To exchange tokens between networks, it is useful to use a bridge. Basically, they are tools that allow you to switch between ERC-20 and BEP-20 tokens. Binance has its own bridge.

What are the stablecoins in ERC-20 and BEP-20?

Both ERC-20 and BEP-20 have fairly well-established stablecoins. Tether (USDT) and USD Coin (USDC) use the ERC-20 standard. In contrast, BSC has BUSD, the predominant BEP-20 stablecoin in this standard.

Can transaction costs be reduced in ERC-20?

Ethereum is the network that uses the ERC20 standard and all its tokens are governed by network fees. However, there are layer 2 blockchains that also use the same token format, but have lower fees and are more efficient.

Of course, these alternatives are centralized and their use is not as widespread as in Ethereum. We have mentioned several of these layer 2 blockchains several times, but Base and Polygon are the most popular.

Conclusion

By reviewing the differences between ERC20 and BEP20, we can understand that there is a very marked difference in fees and transaction speed. Each standard has pros and cons, but both are excellent options for creating a crypto project. Use this information to decide on a blockchain and start trading on it.

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