What Is BEP-2?

BEP-2 represents a significant milestone in the evolution of blockchain ecosystem development. As major cryptocurrency exchanges sought to expand their technological capabilities, the launch of original mainnets in 2017 established foundations for comprehensive blockchain infrastructures. The development of BEP-2 as a token standard emerged from the ambition to create a competitive alternative to Ethereum's dominant ERC-20 standard, enabling developers and projects to build on original blockchain networks with greater ease and efficiency.

What Is BEP-2?

BEP-2 is a technical standard designed specifically for the issuance and implementation of tokens on BNB Beacon Chain. This standard establishes a comprehensive set of rules and specifications that all tokens must adhere to in order to function properly within the blockchain ecosystem.

The creation of BEP-2 was directly inspired by Ethereum's revolutionary ERC-20 token standard. Before Ethereum introduced the concept of token templates, cryptocurrency projects were required to build their entire blockchain infrastructure from scratch, which was both time-consuming and technically demanding. Ethereum's ERC-20 standard simplified this process dramatically by providing a blueprint that developers could follow to create new tokens quickly and efficiently. This innovation democratized token creation, making it accessible even to those without extensive technical expertise.

Recognizing the value of this approach, developers sought to offer a similar solution within alternative ecosystems. BEP-2 serves as a standardized answer to ERC-20, providing developers with a standardized framework for creating tokens on BNB Beacon Chain. The standard defines common functions and behaviors that tokens must implement, ensuring compatibility and interoperability within the ecosystem.

What Is BNB Beacon Chain?

BNB Beacon Chain represents an important venture into blockchain technology. Launched in 2017, this blockchain serves as the technological foundation for the BEP-2 token standard and was initially designed to power decentralized trading platforms.

The technical architecture of this blockchain employs an innovative combination of two consensus mechanisms: Delegated Proof-of-Stake (DPoS) and Practical Byzantine Fault Tolerance (pBFT). This hybrid approach offers several advantages for block mining and transaction validation. Most notably, it provides an energy-efficient alternative to the Proof-of-Work protocol used by Bitcoin and formerly by Ethereum, addressing one of the most significant criticisms of early blockchain technology.

BNB Beacon Chain has successfully attracted numerous token migrations to its network. Some projects have completely transitioned to this blockchain, while others have created tokenized versions of their assets to exist on multiple blockchains simultaneously. A prominent example is Bitcoin itself, which created BTCB—a Bitcoin-pegged token on BNB Beacon Chain. This wrapped version maintains the same price as Bitcoin while enabling interaction with the ecosystem. This process, known as tokenization, allows assets from one blockchain to be represented and traded on another, significantly expanding their utility and accessibility. BTCB specifically enables users to purchase other BEP-2 tokens through decentralized trading platforms.

What Is BEP-20?

Despite the functionality and success of BNB Beacon Chain and the BEP-2 standard, developers recognized limitations when it came to supporting the rapidly growing Decentralized Finance (DeFi) sector. The original blockchain lacked the sophisticated smart contract capabilities necessary for complex DeFi applications.

In September 2020, a second blockchain called Binance Smart Chain (BSC) was launched, introducing a new token standard named BEP-20. This new standard was specifically designed to support smart contracts and DeFi protocols, addressing the limitations of BEP-2. BEP-20 continues to be the primary standard used on BSC, powering thousands of decentralized applications, DeFi protocols, and cryptocurrency projects.

What Is the Difference Between BEP-2 and BEP-20?

While both BEP-2 and BEP-20 are token standards within the BNB ecosystem, they operate on different blockchains and possess distinct characteristics that make them suitable for different use cases.

The most fundamental difference lies in smart contract support. BEP-2 does not support smart contracts or batch transfers, limiting its functionality to basic token transactions. In contrast, BEP-20 was specifically engineered to support smart contracts, making it the preferred choice for DeFi applications and complex decentralized protocols.

Token addresses also differ between the two standards. BEP-2 token addresses begin with the prefix "bnb," while BEP-20 addresses start with "0x," similar to Ethereum's ERC-20 addresses. This similarity is not coincidental—BEP-20 tokens are designed to be compatible with Ethereum and the Ethereum Virtual Machine (EVM), facilitating easier integration and cross-chain functionality.

The consensus mechanisms underlying each standard also vary. BEP-2 operates on a Proof-of-Work consensus mechanism, while BEP-20 utilizes Proof-of-Stake Authority, which offers improved efficiency and scalability. Additionally, BEP-2 transactions incur transaction fees, whereas BEP-20 transactions feature significantly lower transaction fees, making it more economical for frequent trading and DeFi interactions.

Scalability represents another crucial difference. BEP-2 has limited support for scalability, which can restrict the volume and complexity of transactions it can handle. BEP-20, by contrast, offers significantly greater flexibility and scalability, enabling it to support the high transaction volumes and complex operations required by modern DeFi applications.

How Do BNB Beacon Chain and Binance Smart Chain Differ?

BNB Beacon Chain was originally conceived to power decentralized trading platforms. The platform aimed to provide anonymous trading capabilities and lower commission fees compared to centralized platforms. Over time, BNB Beacon Chain evolved into a decentralized, community-driven, and permissionless blockchain ecosystem.

When DeFi gained significant popularity in 2020, new projects began emerging rapidly across the cryptocurrency industry, primarily on Ethereum where the concept originated. Developers created innovative platforms offering lending, staking, yield farming, and numerous other financial services. It was recognized that BNB Beacon Chain was not adequately equipped to support the DeFi revolution. Its limited scalability meant users had little incentive to migrate from Ethereum, which despite its high fees, offered superior functionality for DeFi applications.

To address this challenge, Binance Smart Chain was launched in 2020. BSC was purpose-built for smart contracts and DeFi applications, featuring a much more scalable token model. Crucially, it also resolved the issue of high transaction fees that plagued Ethereum users, making it an attractive alternative for both developers and users.

The advantages of BSC were quickly recognized by the cryptocurrency community, leading to rapid adoption and growth. While many users remained loyal to Ethereum due to its established ecosystem and network effects, BSC successfully carved out its own substantial market share, emerging as one of Ethereum's largest competitors in the smart contract and DeFi space.

How Does BEP-2 Compare to ERC-20?

BEP-2 serves as the token standard for minting and deploying tokens on BNB Beacon Chain, while ERC-20 is the technical standard for building and implementing smart contracts on Ethereum's network. Despite BEP-2 being inspired by ERC-20, the two standards actually have relatively little in common in terms of functionality and capabilities.

The true equivalent to ERC-20 in the BNB ecosystem is BEP-20, not BEP-2. BEP-20 and ERC-20 can be considered twin standards, serving virtually identical purposes despite BEP-20 being created years after ERC-20. The two standards share similar architectures, functionalities, and use cases, with only minor differences primarily related to their respective ecosystems. BEP-20 operates within the BNB infrastructure, while ERC-20 remains native to Ethereum.

Cross-chain bridge technologies have created connectivity between these ecosystems, enabling token transfers between Binance Smart Chain and Ethereum. However, tokens moving between the two networks still require conversion to the appropriate standard. ERC-20 tokens remain fully compatible only with Ethereum's ecosystem and cannot be deployed on other networks without undergoing conversion to that network's token standard, maintaining the distinction between these blockchain environments.

Conclusion

BEP-2 represents an important chapter in blockchain evolution, serving as an original token standard on BNB Beacon Chain. However, it has been largely superseded by BEP-20 in terms of utility, functionality, and adoption. The limitations of BEP-2—particularly its lack of smart contract support and limited scalability—have resulted in fewer BEP-2 tokens being created and maintained compared to BEP-20.

Consequently, wallet support for BEP-2 tokens is more limited than for BEP-20, and the tokens that do use this standard generally lack the diverse use cases found in projects built on Binance Smart Chain. The dominance of DeFi and smart contract-based applications has made BEP-20 the preferred standard for most developers and projects within the ecosystem.

Nevertheless, BEP-2 remains an active and functional standard with continued relevance for specific use cases. It is particularly useful for those who wish to engage with decentralized trading platforms and prefer the characteristics of the original BNB Beacon Chain. While it may no longer be at the forefront of blockchain innovation, BEP-2 continues to serve its original purpose and maintains a place in the broader ecosystem. The evolution from BEP-2 to BEP-20 demonstrates adaptability and commitment to meeting the changing needs of the cryptocurrency community, ensuring platforms remain competitive in the rapidly evolving blockchain landscape.

FAQ

Is BEP2 still available?

No, BEP2 is no longer available. It was discontinued on June 14, 2024, and all related services have ceased operations since then.

Is BEP2 the same as BEP20?

No, BEP2 and BEP20 are different token standards. BEP2 is for Binance Chain, while BEP20 is for BNB Smart Chain and is compatible with ERC-20.

What is BEP2?

BEP2 is a token standard for BNB Chain, defining rules for tokens. It's similar to Ethereum's ERC-20, used for smart contracts and DeFi applications on Binance's blockchain network.

Can I send BEP2 to BEP20?

Yes, you can send BEP2 to BEP20. Select the BEP20 network when transferring and ensure the receiving address is correct. Both BEP2 and BEP20 BNB are supported for transfers.