If you ever get this question how long we have come in the Blockchain ecosystem ever since the inception of bitcoin in 2008, the unbelievable number of Blockchain platforms available in the market is the perfect answer. Both the private and the public Blockchains have grown far beyond expectations, making it possible for the world to implement various use-cases and reach a state where Blockchain has become an essential part of every sector. One such platform is Binance chain and BEP20 is a token standard on the Binance Smart Chain. In this blog, you will get to know to launch your own token like BEP2O on Binance chain.
Binance is most commonly and popularly known for its cryptocurrency exchange which has accommodated our crypto trading requirements since 2017. With its superior services and advanced interface, Binance has become one of the best crypto exchanges in the world. You are sure to find the name “Binance” on any website if you search for the best crypto exchanges. There are more than 1889 individual cryptocurrencies available on the Binance platform.
While the world knows Binance for its crypto exchange, only a few people are aware of the fact that Binance has its own Blockchain network called Binance Chain. The native coin of the Binance Chain is Binance Coin(BNB) and the network is primarily focused on providing speed and flexibility in the Blockchain ecosystem.
What Is Binance Chain
In April of 2019, Binance community initiated a project called Binance Chain primarily to bring more freedom and flexibility for their traders which other Blockchain platforms failed to accommodate. Another focus of this chain is to provide a platform for people or projects looking to raise money or liquidity.
Contrary to the other Blockchains, Binance Chain has been built with features that will create the perfect environment for exchanges. Binance DEX is the decentralized exchange module developed on the top of the Binance Chain. The Binance DEX further allows the exchange of digital assets by leveraging the Binance Chain.
Coming to the features of Binance Chain, an instant transaction facility is probably the most important one considering its primary use case of facilitating crypto trading. Binance chain has a one-second block time which is much faster when compared to other Blockchains.
This Blockchain also provides the functionality of smart contracts to further optimize and standardise the trades. Being a community-driven project, Binance Chain can be deemed as one of the best Blockchain platforms for use cases involving crypto exchange.
How Does Binance Chain Work?
The Binance Chain works on the Proof of Stake algorithm or more specifically, the Proof of Staked Authority(PoSA). In this consensus mechanism, the participants who hold the BNB or Binance Coin become a validator on the Binance Chain. Becoming a validator means that they can earn on the Blockchain by receiving transaction fees in exchange for validating blocks.
The tokens available on the Binance chain are pegged to the actual cryptocurrencies which means that if you buy 1 BTCB you are actually buying 1 BTC. In addition to this, as the main purpose of Binance Chain is to support crypto trading, it also provides support for various wallets which can be used by the user to store their assets. A few of these wallets are Trust Wallet, Meta Mask, Ledger, and Trezor.
What is BEP20 and how it fits into the scenario?
The success of any public Blockchain is subject to its ability to accommodate the development of tokens. Basically, if a person can create a token on a Blockchain he can incorporate that Blockchain for his use-case because every use-case is, either directly or indirectly, dependent on the payment structure.
As of now, ERC20 token is the most commonly used token for various purposes. Even the prominent stable coins such as Tether(USDT) and USDC are of ERC20 token type which is specific to the Ethereum Blockchain. This has created a monopoly of Ethereum in the crypto world. However, the ERC20 token has a new and worthy opponent, the BEP20 token standard.
BEP20 is a token standard on the Binance Smart Chain and it extends the ERC20 token standard. However, BEP20 is not the first token standard developed by Binance. While BEP20 is on the Binance Smart Chain, the Binance Chain has the BEP2 token standard. But keeping in mind that both ERC20 and BEP2 are being used currently in many use-cases, the BEP20 token standard has been made compatible with both.
The BEP20 token has specifically been made for the Binance Smart Chain to provide a better and improved token standard on a Blockchain which is more flexible and fast. The tokens built using BEP20 can be used for numerous use-cases as they can represent anything on the Binance Smart Chain such as shares of a business or bonds in form of a stable coin. Other possible implementations of BEP20 token are creating a native asset using a BEP20 token in a specific use-case or to even peg the BEP20 tokens from other tokens to make them usable on the Binance Smart Chain.
It is worth considering that the BEP20 tokens work in a similar fashion as BEP2. Their transfer is subject to a fee in terms of BNB which acts as the incentive model of the consensus algorithm. Therefore, any transfer of the BEP20 token will have a transfer fee in BNB which will be given to the validators.
What exactly is Binance Smart Chain here?
The Binance Smart Chain is often deemed as an extension to the Binance Chain. While the Binance Chain was primarily built for faster and efficient trading of cryptocurrencies, it resulted in a congested network. The Binance community soon realised that their Blockchain could not accommodate both the high trading volumes as well as decentralised applications. As a result, the Binance Smart Chain was created so that the two worlds could be separated. Now, the high trading volume is handled by the Binance Chain while the decentralised applications are built on the Binance Smart Chain and both chains complement each other.
Any decentralised application on the Binance Smart Chain that needs high trading of cryptocurrencies can utilize the advanced functionality of the Binance Chain while the tokens listed or built on the Binance Chain can experience more usefulness and a wider application as they can be used on the Binance Smart Chain.
At the heart of this cross-chain compatibility is the token standard of the Binance Chain and the token standard of the Binance Smart Chain. The fact that BEP20 tokens can be swapped for BEP2 tokens and vice versa is the reason for seamless cross-chain compatibility. The easiest way to do so is perhaps via the Binance Chain Wallet extension, though more methods will undoubtedly emerge over time.
How To Create Your Own Token Like BEP-20 On Binance Chain
The first and foremost thing to consider before you create your BEP20 token on the Binance Smart Chain is to define the use of your token and the functionalities it will facilitate. As the BEP20 token is like an extension of the ERC20 token standard, it requires some predefined functions and characteristics that are imperative to include in the smart contract. These are:
- Token Name: When creating a token, you’ll need to choose your token name perfectly E.g. “Your Token”
- Token Symbol: The next thing, for all tokens symbol, is much needed one, so you have to decide your token symbol E.g. “YT”
- Token Decimal Places: If the token has 8 decimal places it means that the fraction part of the tokens will be “100000000”
- Total Supply: You need to provide the number of tokens that be supplied in your use-case. This number should be well thought as it determines the circulation of the token and affects the value of the token
- Balance Of: It is a predefined function that returns the token balance of the account to the authorized person address
These are just the basic functions that are the must-haves for creating a BEP20 token on the Binance Smart Chain. Other than these, depending on your use-case, there may be a number of functions that also need to be defined for example for staking the token or for the transfer of the token.
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The development of such a token with advanced functionalities should be carried out by experienced developers. Especially in the current scenario where the DeFi world has experienced numerous attacks and millions of dollars have been lost due to poorly developed contracts and tokens. The seasoned developers at QuillHash can quickly develop your token on the Binance Smart Chain, adhering to the best practices and ensuring a safe future for your use-case, free from any potential hacks.
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