BEP2 vs BEP20: Key Differences

BEP20 and BEP2 are well-known token standards. However, there is a lot of confusion when it comes to their functionalities, specific features, and even the blockchains that support them.

Initially, there were two networks:

BNB Chain (also called Binance Chain, Beacon Chain) with the BEP2 standard was used to perform the role of a governance layer and was responsible for voting rights and staking.
BNB Smart Chain, formerly Binance Smart Chain, with the BEP20 standard, was responsible for Web3 applications, DeFi services, consensus layers, dApps, and others.

Over time, BNB Beacon Chain became redundant and merged with BNB Smart Chain. As a result, Binance will withdraw the BEP2 tokens from circulation.

Still, one can swap BEP2 and BEP20 tokens without any issues until Binance officially announces that it stops supporting BEP2.

Understanding BEP2

BEP2 is the standard of BNB Chain, also known as BNB Beacon Chain. The BNB Beacon Chain is the first network by Binance, and it was developed to perform the governance function and provide specifications for issuing tokens on this network. Over time, this network became redundant, and Binance decided to merge it with BNB Smart Chain and withdraw BEP2 tokens from circulation. By now, many crypto exchanges still support BEP2.

Introduction to Binance Chain

Binance Chain, or BNB Beacon Chain, was Binance's first blockchain. It was created in 2019 when the BNB utility token migrated from the Ethereum blockchain to become the BNB Chain token. Until recently, it played an important role in the Binance ecosystem. Here is a short overview of how BEP2 could be used:

BNB BEP2 could be used to pay trading and transaction fees on the Binance exchange.
It allowed users to buy tokens on the Binance Launchpad.
It allowed projects to offer the BEP2 token holders to participate in decision-making processes.
BEP2 enabled users to transfer their digital assets within the Binance ecosystem.

However, over time, it became redundant, and the team decided to merge it with the BNB Smart Chain.

Exploring BEP20

BEP20 is the token standard of BNB Smart Chain, formerly Binance Smart Chain. This network supports smart contracts and decentralized applications, so the primary use of BEP20 tokens is to enable the creation of decentralized applications. Along with this, they serve as a means of exchange for goods and services.

Overview of Binance Smart Chain

BNB Smart Chain, formerly Binance Smart Chain, is a network that utilizes the BEP20 token standard and offers a wide range of tools for Web3 and decentralized applications. This high-performance blockchain allows developers to create all types of applications and services, including DeFi, blockchain-based games, and more.

BEP2 vs BEP20: Pros and Cons

BEP2 and BEP20 tokens have their advantages and drawbacks. Here are the main pros and cons of BEP20 vs BEP2 tokens.

BEP2 pros

Among the main advantages of BEP2 tokens, the following are the most important:

Speed and security are suitable for high-frequency trading.
Simplicity and ease of use.
Wide acceptance among centralized and decentralized exchanges and other services that support BNB.
Low fees.

BEP2 Cons

Among the main drawbacks of BEP2:

Centralization – Binance controls the network.
Limited functionality – BEP2 standard doesn’t support smart contracts and dApps.

Additionally, Binance is going to discontinue this standard.

BEP20 pros

BEP20 is a more common standard than BEP2, with the following advantages:

It is compatible with the Ethereum Virtual Machine. It can be easily integrated into wallets, dApps, and other services.
Fast transactions and low fees.
Support of smart contracts and decentralized applications.

BEP20 cons

The drawbacks of BEP20 are the following:

Centralization concerns – even though the BNB Smart Chain is technically decentralized, several main nodes are operated by Binance, raising concerns about its decentralization status.
Network congestions – BNB Smart Chain is a pretty popular network. Thus, network congestion accompanied by increases in gas fees is possible.
Scalability issues – due to the limited number of validators, blockchain can face scalability issues when there is a high flow of transactions.

Main Differences Between BEP2 and BEP20

When comparing BEP2 vs BEP20 tokens, one shall understand that they serve distinct purposes within the Binance ecosystem. The main difference between BEP2 and BEP20 is the blockchains on which they run.

BEP2 tokens are specifically designed for use within the Binance Chain and are not interoperable with other blockchains. These tokens facilitate fast and secure trading, cover trading and transaction fees, enable participation in token sales, support governance mechanisms, and allow asset transfers within the Binance ecosystem.

BEP20 tokens are developed for the Binance Smart Chain (BSC) and built following the Ethereum ERC-20 standard, ensuring full compatibility with the Ethereum ecosystem. This design allows BEP20 tokens to create and interact with decentralized applications (dApps) on the BSC.

They also serve as a means of exchange for goods and services and play a crucial role in promoting the use of decentralized finance (DeFi) applications. The versatility of BEP20 tokens extends to various other applications within the BSC ecosystem, offering a broader range of functionalities compared to their BEP2 counterparts.

FAQ

Where should I securely store BEP2 or BEP20 tokens?

Many wallets support both standards. You can store your BEP2 and BEP20 tokens in most multi-currency wallets.

Are BEP2 and BEP20 the same?

No, BEP2 and BEP20 are different token standards used on different blockchains. This is why when you send tokens, make sure you specify correctly whether it is the BEP2 or BEP20 standard. Otherwise, you may lose your funds.

How can I determine whether my BNB is BEP2 or BEP20?

You can determine whether you hold BNB BEP2 or BEP20 by checking the address format. BEP2 tokens have an address format that starts with “bnb”, while BEP20 tokens have an address format that starts with “0x”.

Is BEP2 superior to BEP20?

BEP2 was used for the BNB Beacon Chain. The BNB Beacon Chain is not supported anymore, and thus, the token standard, even though still supported, will be abandoned over time. This is why comparing BEP2 vs BEP20 or stating that one standard is better is incorrect.

Is it possible to send Bitcoin to a BEP20 wallet?

It depends on the wallet. As a rule, wallets that support the BEP20 standard also support Bitcoin. However, before sending any coins to any wallet, double-check whether you have chosen the correct standard and whether the wallet supports this standard. Otherwise, your funds will be lost.

On LetsExchange, you can swap Bitcoin to over 4,500 coins and tokens, including those that run on the BNB Smart Chain.

Can BEP20 tokens operate on the Ethereum network?

BEP20 tokens can be easily integrated into Ethereum wallets and exchanges because they were built per the Ethereum ERC20 standards. However, the BEP20 standard was created to be supported by the BNB Smart Chain, which is why BEP20 tokens cannot operate on the Ethereum blockchain.