BEP-2: What You Need To Know
Binance, one of the largest cryptocurrency exchanges in the world, launched its original mainnet back in 2017. However, three years later, in September 2020, the exchange decided to launch its second blockchain, called Binance Smart Chain (BSC). The original one, on the other hand, was known as Binance Chain or BNB Beacon Chain.
Binance insisted that the new Blockchain was introduced to assist with the development of the company. It made it so that talented developers could make smart contracts, dApps, Decentralized Finance (DeFi) protocols, and more. However, it did not dismiss the original chain, and the two started running side-by-side. The BEP-20 token model, which runs on BSC, was deemed better for development. But what about the original token standard on Binance Chain, known as BEP-2? This guide will explain what BEP-2 is and how it compares to BEP-20.
What Is BEP-2?
BEP-2 is a technical standard for the issuance and implementation of tokens on Binance’s original blockchain. It contains a set of rules that tokens using this standard have to follow in order to function.
Binance Chain was originally launched as the exchange’s response to Ethereum and ERC-20. ERC-20 itself is a token model derived from the Ethereum blockchain. Ethereum invented the concept of creating a model, or a blueprint used to create tokens. Before Ethereum, everyone had to build their blockchain and crypto tokens from scratch.
Ethereum’s ERC-20 came as a template, which allowed users to launch new tokens with ease. Even those without extensive technical experience can do that today. The fact that there are thousands of cryptocurrencies proves it. BEP-2 came as Binance’s attempt to offer something similar on BNB Beacon Chain.
What Is Binance Chain?
Binance Chain is the original blockchain of the digital asset exchange, Binance. It was launched in 2017, and it’s the tech behind BEP-2 — one of Binance’s two cryptocurrency standards. When it comes to technology, it uses a combination of DPoS (Delegated Proof-of-Stake) and pBFT (Practical Byzantine Fault Tolerance). This combination has served it well for block mining. It’s also worth noting that the two consensus algorithms combined offer a great alternative to the energy-consuming Proof-of-Work protocol, used by Bitcoin and formerly Ethereum.
Binance Chain has seen several tokens migrate to its network. Some have switched fully, while others have only sent a portion of their supply to Binance Chain. One example of this is Bitcoin itself, which created a BEP-2 version of itself. Now known as BTCB, it’s a Bitcoin-pegged token on Binance’s network. That means that it still has the same price as BTC, but it can now interact on a different blockchain. This process is known as tokenization, and it produces wrapped versions of assets.
With BTCB, users can purchase other tokens that run on Binance Chain via Binance’s DEX, the platform’s own decentralized exchange.
What Is BEP-20?
Despite its features, Binance Chain was deemed unfit for Decentralized Finance (DeFi). This is why the exchange launched a new blockchain — Binance Smart Chain — with a new token standard. The new standard was named BEP-20, and it is still in use today on BSC.
What Is the Difference Between BEP-2 and BEP-20?
Apart from the fact that BEP-2 and BEP-20 run on different blockchains, they differ in other ways. A prime example of this concerns smart contract support. BEP-2 doesn’t offer support batch transfers. Meanwhile, BEP-20 was tailored specifically to support smart contracts in Binance’s ecosystem.
The two differ when it comes to token addresses, as well. BEP-2 token addresses start with “bnb,” while BEP-20 addresses start with “0x,” like ERC-20 addresses. For this reason, BEP-20 tokens are compatible with Ethereum and EVM (Ethereum Virtual Machine) tokens.
It is also worth noting that the consensus mechanisms that the two token standards run on are different. BEP-2 runs on Proof-of-Work, while BEP-20 uses Proof-of-Stake Authority. BEP-2 also comes with transaction fees, whereas BEP-20 on the other hand, features no transaction fees. Finally, BEP-2 has limited support for scalability, while BEP-20 is a lot more flexible.
How Do Binance Chain and Binance Smart Chain Differ?
Binance originally launched its Binance Chain — later renamed to BNB Beacon Chain — to run its DEX. In addition to that, it sought to offer anonymous trading and lower commissions, which were not offered on its CEX. Eventually, BNB Chain became a decentralized, community-driven, and permissionless blockchain ecosystem.
Binance Smart Chain, or BSC, was launched in 2020. After Decentralized Finance (DeFi) blew up, projects started emerging all over the crypto industry. Of course, they were primarily coming out on Ethereum, where the concept originated. Developers started creating projects that offered lending, staking, yield farming and more. Binance recognized the opportunity, but it also recognized that Binance Chain was not fit to house DeFi. It had limited scalability, so users had no incentive to switch over from Ethereum.
To fix the problem, it launched Binance Smart Chain. As mentioned, it was specifically created for smart contracts and DeFi. It had a much more scalable token model and it swiftly attracted new projects as BSC also solved the issue surrounding high transaction fees.
It did not take long for users to recognize the advantages, which led to the rapid growth of BSC. Of course, many remained loyal to Ethereum and remained on its network. But BSC ended up being an overall success and one of Ethereum’s largest rivals.
How Does BEP-2 Compare to ERC-20?
BEP-2 is a token standard for minting and deploying tokens on BNB Beacon Chain. ERC-20, on the other hand, is the technical standard for building and implementing smart contracts on Ethereum’s network. As such, it has little in common with BEP-2, even though BEP-2 was inspired by it.
Instead, BEP-20 is much more similar to ERC-20, and it can be said that the two standards are twins. Although BEP-20 was created years after ERC-20, the two serve the same purpose and there are almost no differences between them. Of course, BEP-20 is still in Binance’s ecosystem, while ERC-20 remains in its own Ethereum ecosystem.
With the launch of Binance Bridge, the two are now connected, however, tokens transferring between the two ecosystems still need to be converted. ERC-20 tokens are still only fully compatible with Ethereum’s ecosystem. As such, they cannot be deployed in another network without converting to its token standard.
BEP-2: The Final Verdict
While BEP-2 was Binance’s original token standard that launched on its first blockchain, it is less useful than BEP-20. As a result, there are fewer BEP-2 tokens, and not as many wallets support BEP-2 tokens. There are still some that use it, but these tokens generally lack the use cases of projects from BSC. As a result, they are no longer that common. Still, BEP-2 is still an active standard, and it is useful for those who wish to engage with Binance DEX.
FAQs
What Is the Difference Between BEP-2 and BEP-20?
The main difference between BEP-2 and BEP-20 is that they run on different blockchains. While both chains belong to Binance, BEP-2 is on Binance Chain, and BEP-20 is on Binance Smart Chain. However, they also differ strongly when it comes to what they do and what kind of token standard they are.
What Is the Difference Between ERC-20, BEP-2, and BEP-20?
BEP-20 runs on Binance Smart Chain, and it is used for development, launching new tokens, DeFi, dApps, and more. ERC-20 does practically the same but on the Ethereum blockchain. BEP-2 serves as a technical standard for issuing and implementing tokens on Binance’s original blockchain — BNB Beacon Chain (Binance Chain).
Is BEP-2 the Same As Bitcoin?
No, BEP-2 is the native cryptocurrency that runs on Binance Chain. Bitcoin, on the other hand, is its own coin that runs on the Bitcoin blockchain. However, there is a wrapped version of Bitcoin on the Binance Chain, called Bitcoin BEP2 (BTCB).
How Do You Tell if a Coin Is BEP-2 or BEP-20?
The easiest way to differentiate the two is to look at their token address. BEP-2, which runs on BNB Beacon Chain, has an address that starts with “bnb.” BEP-20, which runs on BSC, has an address that starts with “0x,” similar to ERC-20 addresses.
What Wallets Support BEP-2?
BEP-2 is not supported by as many wallets as BEP-20. However, you can still store it in Ledger Nano X, Ledger Nano S, Trezor Model T, or Coolwallet S.
