Binance has two different blockchains. One is the Binance chain, that is where their CEX operates. The other one is the BNB chain, which caters to dApps. Until a short while ago also known as the BSC (Binance Smart Chain). However, both chains have the same architecture.
BEP-2 and BEP-20 tokens are native to the Binance ecosystem. Both cater to different functions. Meanwhile, both token standards are gaining popularity. We are going to take a deep dive into the two tokens and highlight a few popular coins from each of them.
Withdrawals resumed for:
— Binance (@binance) April 19, 2021
What Is the BEP-2 Token?
BEP-2 tokens are tokens issued and implemented on the Binance Chain. It is the token standard for the Binance Chain. Binance uses this as a token standard for all transactions on the Binance crypto exchange. The token works on both their CEX and their DEX. However, the token doesn’t work on any other blockchain. Hence, this is where its functionality ends.
Binance customers can use the BNB coin as a BEP-2 token only for transaction fees. This is possible on both the Binance CEX and DEX. On the other hand, it is possible to turn BNB as a BEP-2 token into a BEP-20 token. A BEP-20 token functions in all Binance ecosystems.
The token standard defines the specific rules. Nonetheless, each issued token can have different applications. This, in turn, impacts their use cases. Developers create each token in general with different use cases.
Trading BEP-2 tokens requires BNB to pay for the transaction costs. Trading in BEP-2 tokens is only possible on the Binance DEX. This is a decentralized exchange that runs on top of the Binance Chain. However, the Binance Chain can’t execute smart contracts. Also, dApp ecosystems don’t function on the Binance Chain. On the other hand, the BNB Chain and the Binance Chain work seamlessly together. As a result, BEP-2 tokens swap with ease to identical BEP-20 tokens.
It is possible to store BEP-2 tokens in a wide variety of wallets. For mobile wallets, the Trust Wallet is an excellent choice. Many hardware wallets also support BEP-2 tokens. Both the Ledger Nano X and Nano S, and the Trezor T work just fine.
What Are Some Popular BEP-2 Coins?
- BTCB — The BTCB coin is 100% backed by Bitcoin (BTC).
- BUSD — This is a regulated USD-backed stablecoin. It pegs 1:1 to the US-dollar. BUSD is available as a BEP-2 and ERC-20 token. The New York State Department of Financial Services (NYDFS) approved this coin. Binance issued this coin in partnership with Paxos.
Various other coins have seen releases as BEP-2 coins. Like Fantom (FTM), Polygon (MATIC), and Tether (USDT). Furthermore, Ripple (XRP), Polkadot (DOT), and Cardano (ADA) are on that list.
What Is the BEP-20 Token?
BEP-20 token is also a token standard. However, this is a standard for the BNB Chain. The BNB Chain caters to dApps. This frees up the Binance Chain, designed for ultra-fast trading. BEP-20 tokens are compatible with smart contracts on Ethereum. And also with the Ethereum Virtual Machine (EVM). This is the software platform for building dApps on Ethereum.
BEP-20 tokens follow the standard set by the ERC-20 token. This in turn is the most common token standard on Ethereum. The BEP-20 token is compatible with all BEP-2 and ERC-20 tokens. As a result, it can connect with other blockchains through bridging. Interoperability is the keyword for this token. Most notably the dual chain architecture with the Binance Chain.
All BEP-20 transfers require a fee payable in BNB. This gives validators an incentive to process transactions. For their work of adding transactions to the blockchain, they receive BNB. The word BEP is short for ‘Binance Smart Chain Evolution Proposal’.
BEP-20 deposits and withdrawals are temporarily unavailable on https://t.co/QILSkzx7ac.
Rest assured our team is working on it.
Thank you for your patience and apologies for any inconvenience caused.
— Binance (@binance) August 27, 2021
What Are Some Popular BEP-20 Tokens?
The BNB Chain has many active projects. Developers built plenty of dApps on the BNB Chain, and some also launch their coins or tokens on the BNB Chain. All these coins or tokens are per definition BEP-20 tokens. Here is a closer look at some BEP-20 tokens.
- PancakeSwap (CAKE) — Meet the most popular DEX on the BNB Chain with the highest TVL. In general, this is one of the most popular DEXs around. This dApp launched on the BNB Chain. Consequently, so did its native CAKE token. At the time of writing, the Total Value Locked (TVL) is $4.38 billion.
- Binance Coin (BNB) — This coin powers all the Binance ecosystem. It is one of the most popular utility tokens around.
- Alpha Finance Lab (ALPHA) — Another protocol that launched on the BNB Chain. The ALPHA token is also a utility token. Holders can stake the ALPHA token. This will earn them a share of the network fees.
The BEP-2 and BEP-20 tokens are both token standards for their respective chains. BEP-2 for the Binance Chain and BEP-20 for the BNB Chain. They both have a wide array of utilities. BEP-2 tokens work on both the Binance CEX and DEX. The BNB coin is for instance a discount token on the Binance CEX for paying transaction fees. On the other hand, Binance customers use it also to pay for services and goods. Transactions via the Binance Chain and BNB Chain are cheaper if compared to Ethereum.
Join us on Telegram to receive free trading signals.
For more cryptocurrency news, check out the Altcoin Buzz YouTube channel.