Complete Guide to BEP-20 Wallet: Binance Standard and Its Applications

In the modern crypto industry, BEP-20 has become one of the most common standards for creating and managing digital assets. If you plan to work with tokens on Binance Smart Chain, you will definitely need a BEP-20 wallet to store and transfer these assets. This guide will help you understand all aspects of this standard.

Development History: From Bitcoin Forks to Modern Standards

In the early stages of the cryptocurrency industry, creating a new digital asset required significant effort. Developers had to either build their own blockchain from scratch or use a Bitcoin fork. This situation changed dramatically after the launch of Ethereum, which provided developers with a full platform and tools for creating tokens.

Ethereum introduced the revolutionary ERC-20 standard, which made it easy to create new tokens based on a single template. This approach was so successful that it became the foundation for thousands of crypto projects. However, as the industry evolved, there was a need for alternative solutions that were faster and more cost-efficient.

In response, Binance launched its own blockchain, Binance Smart Chain (BSC), in September 2020, and created a similar standard called BEP-20. This standard nearly fully reproduces the functionality of ERC-20 but operates within a more efficient network.

What is BEP-20: Key Features

BEP-20 is a technical standard for creating and managing tokens on the Binance Smart Chain blockchain. Structurally, it is almost identical to ERC-20 on Ethereum, ensuring compatibility between the two networks.

This standard greatly simplified the process of launching new crypto projects. Developers no longer needed to create their own blockchain or deal with the intricacies of creating their own currency. Anyone could create a BEP-20 token using ready-made smart contracts and tools. The process became so accessible that even a developer with basic programming skills could do it.

BEP-20 tokens are fully compatible with the BSC smart contract ecosystem and are actively used in decentralized finance (DeFi), where they serve as utility tokens, governance tokens, and special assets. All operations with BEP-20 are conducted and paid in BNB — the native token of the Binance platform.

Technical Structure of BSC and Its Role

BNB Smart Chain is Binance’s second blockchain, created as a platform for developing decentralized applications. BSC runs parallel to Binance’s first blockchain (now known as BNB Beacon Chain), which is intended for asset management and staking.

BSC’s appeal lies in several aspects. First, the network has much higher transaction processing speed compared to Ethereum, reducing fees. Second, BSC is fully compatible with the Ethereum Virtual Machine, making it easy to transfer existing projects. Third, the ecosystem is actively developing, attracting more developers and users.

When Binance launched BSC during the DeFi boom, it attracted significant attention from both developers and users. Today, many experts consider Binance Smart Chain a main competitor to Ethereum, especially in the DeFi and decentralized application segments.

Functional Parameters of BEP-20

The BEP-20 standard includes a set of mechanisms that give developers flexibility when creating tokens. Let’s look at four key parameters:

Blacklist — a function that allows adding addresses to a blocked list. This is useful for preventing transactions from potentially malicious addresses or compromised wallets.

Can Mint — an inflation parameter that allows increasing token issuance. Developers can use this function to control the supply of assets and create economic incentives.

Can Burn — a deflationary mechanism opposite to Mint. Burning tokens reduces the total circulating supply, which can theoretically increase the value of remaining assets.

Can Pause — an innovative protection mechanism that allows suspending all token operations in case vulnerabilities or attacks on the smart contract are detected. However, this parameter introduces a centralization element, which is criticized within the crypto community.

Examples of Successful BEP-20 Projects

Hundreds of popular BEP-20 tokens operate on Binance Smart Chain. The most well-known include:

PancakeSwap — the native token of the largest decentralized exchange and automated market maker (AMM) on BSC. PancakeSwap has established itself as one of the most successful DeFi projects in the industry.

Autofarm — a yield aggregator that helps users optimize strategies for earning income from their crypto assets. This is another successful example built on BEP-20.

You can purchase these and other BEP-20 tokens on the centralized exchange Binance, the decentralized Binance DEX, or directly through PancakeSwap.

Choosing a BEP-20 Wallet: Practical Aspects

To work with BEP-20 tokens, you need a compatible wallet. A BEP-20 address is simply an address that can hold and receive tokens on Binance Smart Chain. Note that addresses on Ethereum and BSC both start with “0x”.

When choosing a wallet, ensure it supports the BEP-20 standard. There are several types:

• Hardware wallets — provide maximum security for storage, as private keys never connect to the internet.
• Mobile wallets — convenient for frequent transactions and often integrated into crypto exchange apps.
• Web wallets — accessible via browser, but require careful security considerations.

For example, the Web3 wallet OKX added support for BEP-20 in October 2022 and now allows users to manage tokens of this standard conveniently. When transferring, make sure to specify the correct BEP-20 wallet address and confirm the Binance Smart Chain network.

Comparing BEP-20 and ERC-20: Compatibility and Differences

BEP-20 and ERC-20 perform nearly identical functions within their respective networks. Both standards support basic operations: token transfer, approval, balance checking, and emission management.

The main difference lies in the underlying infrastructure. ERC-20 operates on Ethereum, while BEP-20 runs on Binance Smart Chain. Despite differences in underlying technology, these two standards are fully compatible thanks to Binance Bridge technology.

Conversion process: To transfer an ERC-20 token to Binance Smart Chain, you need to wrap the token into a BEP-20 format. The reverse process is also possible. Wrapping is a reversible process, so tokens can be transferred back and forth without loss. Conversion fees via the bridge are usually absent or minimal.

This compatibility has allowed many projects to operate simultaneously on both networks, increasing asset accessibility for users and expanding trading opportunities.

BEP-2 and BEP-20: Differences Between Binance Standards

In the Binance ecosystem, there are two different standards: BEP-2 and BEP-20. This often causes confusion among newcomers, but the difference is clear.

BEP-2 — a standard for tokens on the original Binance Chain (now called BNB Beacon Chain). This blockchain is mainly used for asset management and staking.

BEP-20 — a standard for Binance Smart Chain, created specifically for developing decentralized applications and DeFi projects.

Both blockchains use BNB as the main asset and operate in parallel. They are fully compatible, and tokens can be converted between BEP-2 and BEP-20 via Binance Bridge.

Your choice depends on your goals: if you’re interested in DeFi, dApps, and GameFi, choose BEP-20. If you need to work with Binance DEX and asset management, BEP-2 is more suitable.

BNB Chain Fusion: Merging Binance Blockchains

In early 2024, Binance announced plans to merge its two blockchains through a process called BNB Chain Fusion. This strategic move aimed to simplify architecture and enhance ecosystem security.

By mid-2024, Binance required users to convert BEP-2 and BEP-8 tokens into the BEP-20 standard to prevent asset loss. After the migration, BNB Beacon Chain and Binance Smart Chain were unified, eliminating vulnerabilities and streamlining interaction.

Users who did not convert in time could recover their assets via command line, which required technical knowledge. The merger was a landmark event in Binance’s history, demonstrating the platform’s readiness to evolve its infrastructure.

Conclusion: The Role of BEP-20 in the Web3 Ecosystem

BEP-20 is a powerful and versatile standard for creating tokens on Binance Smart Chain. Although developed as an alternative to ERC-20, the two standards complement each other rather than compete.

With the emergence of Web3 concepts—aimed at connecting various blockchains and projects—the question of one standard’s superiority over another becomes less relevant. Instead, the industry is moving toward greater integration and interoperability across platforms.

For users, this means more choices, more opportunities, and a more developed ecosystem. If you plan to work with crypto assets, understanding BEP-20 and choosing the right wallet to manage these tokens is an important part of your journey in the crypto world.

Frequently Asked Questions about BEP-20 and Wallets

What address should I use to receive BEP-20 tokens?

A BEP-20 address is a standard Binance Smart Chain wallet address starting with “0x”. Make sure your wallet supports BEP-20 and that you select the BSC network, not Ethereum. Choosing the wrong network can result in loss of funds.

Are BEP-20 and ERC-20 directly compatible?

No, they are not directly compatible. However, ERC-20 tokens can be wrapped into BEP-20 format via Binance Bridge, allowing their use on Binance Smart Chain. The reverse process is also possible.

Which wallets support BEP-20?

Many wallets support BEP-20, from hardware wallets to mobile apps. Choose reputable wallets with regular security updates and BSC support in their documentation.

What fees are involved with BEP-20 tokens?

Fees depend on the network load of Binance Smart Chain. Usually, they are significantly lower than Ethereum transaction fees. When converting between ERC-20 and BEP-20 via Binance Bridge, fees are typically absent or minimal.

Why is BEP-20 considered more economical than ERC-20?

Binance Smart Chain has higher throughput and less congestion compared to Ethereum, which reduces transaction costs and confirmation times, making BEP-20 more accessible for everyday users.