Every year, the Blockchain industry produces creative and cutting-edge developments that challenge the current system and bring about improvements, particularly in the decentralised finance space. Binance Smart chain is an emerging development that benefits its customers with growth and rich digital asset surroundings like never visualised in the decentralised exchange spectrum.
Binance Smart chain will provide the users to launch and create their own digital tokens. Developing a BEP-20 token on the BSC blockchain is quite a simple process. Hence, this article will provide detailed information on how to develop the BEP-20 token. Let’s walk through how that works.
BEP-20 Token standard
Different types of crypto tokens are there in existence and they are classified based on their token standards and the blockchain technology used to build them. BEP-20 token is a standard token that belongs to BSC, a famous blockchain defined for its low transaction cost and high speed. These tokens can define their shares/assets in a project/business or money that is stored in a vault. Ironically, BEP-20 shares similarities with BEP-2 (Binance chain token) and ERC-20 (Ethereum token) and it is compatible with both the token standards.
BEP-20 is the standard token for the BSC blockchain, which is programmable and compatible with the Ethereum Virtual Machine. This makes it a good candidate for developing decentralised applications. To interact with the BSC blockchain, the BEP-20 token standard is needed to pay for transactions, just like Ether is used to pay for gas fees in the Ethereum blockchain. This process makes it possible to develop decentralised applications on BSC using the recent Ethereum tooling.
BSC allows users to create tokens in an easy and simpler way. Each token meets a standard known as BEP-20 and this standard is fundamentally an extension of the ERC-20 token standard. Moreover, it also provides information on who can use these tokens. This BEP-20 token standard provides the flexibility in providing the huge token range. For instance, the BEP-20 token standard can be used to indicate digital assets like business stocks and stablecoins.
Token standards like BEP-20 can guarantee general functions like transfer of token, control of the token holder, and balance recovery. Moreover, customers can have the capacity to change BSC tokens for simple BEP-2 Compliant Binance chain tokens. However, the Binance blockchain network needed a fee to be paid to BNB for all the transactions made with these tokens in the chain. Some of the BEP-20 tokens that exist today - are Binance Pegged Tokens (Peggy Coins), PancakeSwap Token (Cake), BakerySwap (BAKE), and so on.
Working process of BEP-20 tokens
BEP-20 tokens development process are comparatively effortless to develop and they were refined to be an extension of ERC-20 tokens and BEP-2 Binance tokens. They are so adaptable with both peg-in and peg-out conversions by using the Binance Bridge or by other compatible wallets. BEP-20 token coins are developed to be easily gauged by other blockchains for performing cross-chain functionality.
The BEP-20 standard token is quite similar to Ethereum’s ERC 20 standard token. Just like ERC 20 standard token, the BEP-20 token also works on the Ethereum Virtual machine (EVM) and it allows the developers to build their projects easily with scalability. While you deploy the BEP-20 token, you can easily scale it to other blockchains and acquire the functionality of cross-chain.
BSC blockchain was developed to support the creation of dApps on EVM and the deployment of smart contracts. If you plan to develop a dApp, you can grasp the service of BSC development to develop native BEP-20 tokens. While these BEP-20 tokens will be compatible with cross-chain functionality, the users will have to pay very less gas fees to transact them.
Services provided by BEP-20 token development
Token Creation - Establishing a BEP20 token on the Binance Smart Chain (BSC) blockchain opens up a huge commercial opportunity. This helps in creating both the fungible and non-fungible tokens.
Integration of Wallet - The primary step in creating a crypto token for any business is an integration of a wallet. This process is basic which allows the participants to trade off their crypto assets efficiently over the secured and safe framework.
Burning and Minting - The BSC token has the capability of minting with a non-fixed total supply. To balance the inflation of token value, owners of tokens can either mint additional tokens or burn additional tokens.
Smart Contract code compilation - BSC delivers the asset management system by making use of a smart contract-powered protocol. Smart contracts are a permanent set of solutions that provide immutability and non-volatility to the basic process through which they are operated. Here, BSC-based BEP-20 tokens are created with a higher degree of stability.
Process for developing the BEP-20 token
Currently, there are many companies providing BEP20 Token Development Services. Since this topic is recently used by most people and entrepreneurs can approach the companies to develop their own token
Research And Discovery - The major process is to conduct primary research before launching the token project. The goal of this process is to discover the target audience.
Planning - This is a critical step in which prerequisite functions like token symbol, type of token, token supply, and so on need to be considered carefully for developing the new token ecosystem.
Design - Proper documentation is needed for developing the schematic design while combining it with the token specifications.
Development - This is one of the major steps in creating the BEP-20 token. The BEP-20 standard token is created based on the specification of the token, the failure rate is minimised and a fully functioning prototype is deployed.
Deployment and testing - The testing process validates your created token is free of mistakes and problems. For an exact result, a token is triggered in most of the testing stages. After clearing the testing process of the token, it is ready to be deployed.
Why create BEP-20 tokens
BEP-20 tokens are smart contracts that work on the BSC blockchain network and they are compatible with Ethereum's EVM and can be developed using the Remix IDE or framework like Truffle. Some of the advantages that can be acquired by entrepreneurs are given.
Speedy Transactions - As discussed before, BSC utilises a proof-of-stake consensus algorithm and is able to acquire a block time of 3 seconds. This is 4 times speedier than the Ethereum blockchain which has a block time of 13 seconds.
Low Transaction Fees - Scalability issues and Ethereum network congestion have again triggered skyrocketing gas fees. BEP-20 token provides a huge relief there as the transaction costs have been reduced.
Cross-chain compatibility - BSC, and Binance chain are known to be compatible coins and hence, the BEP-20 token can be easily moved across both networks using the simple wallet.
Exchange listing - Since the BEP-20 token standard has become very familiar, most of the leading exchanges have listed the BEP-20 token easily.
Prominent Advantages of BEP20 tokens
Some of the advantages that were acquired while creating the BEP-20 token are enlisted here.
- BEP-20 tokens are flexible where they can be interchanged with BEP-2 tokens.
- Users who use these tokens will have to pay fewer transaction and minting fees.
- Token holders can enjoy voting and staking mechanisms.
- The token design is scalable and therefore, it paves the way for greater efficiency in the future.
- It also guarantees secured smart contracts that are used in a secured blockchain ecosystem.
- Also supports interoperability which enables the token transfer across the blockchain networks.
Final thoughts
As per the discussion and research about cryptocurrency, BSC was launched back in May 2020. Since then, it has obtained powerful momentum, and we can see a huge number of dApps with BEP-20 tokens on the platform already.
With high throughput of transactions and low fees, BEP-20 tokens stipulate a much better alternative to ERC-20 counterparts. Logically, swapping between BEP-2 and BEP-20, along with the BEP-20 version of the pegged assets, can be a game-changer for the overall ecosystem.