The world of cryptocurrency is vast and ever-evolving, with a myriad of terms and technologies that can bewilder newcomers. One fundamental aspect that underpins many digital currencies is the concept of token standards. These standards provide guidelines for creating and managing tokens on a blockchain, ensuring compatibility and interoperability. In this article, we’ll explore some of the most popular token standards—specifically ERC-20 and BEP-20—and offer a glimpse into others that exist in the ecosystem.
What is a Token?
Before diving into token standards, it’s essential to understand what a token is. In the context of cryptocurrency, a token is a digital asset created on top of an existing blockchain. Unlike cryptocurrencies like Bitcoin or Ether, tokens can represent a wide range of assets, from utilities within applications to ownership of physical assets or financial instruments. They can be used for various purposes, including voting rights, rewards, and access to certain features of decentralized applications (dApps).
The Need for Token Standards
As the blockchain ecosystem grew, so did the number of tokens. However, without standardized protocols, tokens would operate in silos, making it difficult for developers, exchanges, and wallets to interact with them. Token standards help to ensure consistency and facilitate transactions across different platforms, enabling a seamless experience for users and developers alike.
ERC-20: The Pioneer Standard
What is ERC-20?
The ERC-20 standard was proposed in November 2015 by Fabian Vogelsteller. It outlines a set of rules that an Ethereum-based token must follow. ERC stands for Ethereum Request for Comments, and the "20" refers to the unique identifier for that specific proposal.
Core Features of ERC-20
ERC-20 tokens adhere to a specific set of functions and events, including:
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TotalSupply: Returns the total supply of the token.
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BalanceOf: Shows the token balance of a specific address.
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Transfer: Allows for the transfer of tokens from one address to another.
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TransferFrom: Enables a contract to transfer tokens on behalf of an owner.
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Approve: Authorizes another address to withdraw tokens from the owner’s account.
- Allowance: Checks the amount of tokens that an owner has allowed to be withdrawn by a spender.
Popular Examples of ERC-20 Tokens
Some of the most well-known ERC-20 tokens include:
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Uniswap (UNI)
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Chainlink (LINK)
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Tether (USDT)
- USD Coin (USDC)
The widespread adoption of ERC-20 has led to its standard becoming a benchmark in the industry, and its influence extends beyond Ethereum to other blockchains aiming for compatibility.
BEP-20: The Binance Smart Chain Standard
What is BEP-20?
BEP-20 is a token standard used on the Binance Smart Chain (BSC), which was launched by Binance in September 2020. It was designed to be compatible with the existing Ethereum ERC-20 standard while offering faster transaction speeds and lower fees.
Core Features of BEP-20
BEP-20 retains many of the same functions as ERC-20, including:
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TotalSupply
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BalanceOf
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Transfer
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TransferFrom
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Approve
- Allowance
However, BEP-20 also includes functionalities unique to the Binance Smart Chain ecosystem, allowing for greater flexibility and enhanced capabilities within the BSC environment.
Popular Examples of BEP-20 Tokens
Some widely recognized BEP-20 tokens include:
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PancakeSwap (CAKE)
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SafeMoon (SAFEMOON)
- Venus (XVS)
The BEP-20 standard has gained traction, especially among decentralized finance (DeFi) projects looking for high throughput and low costs.
Beyond ERC-20 and BEP-20: Other Standards
While ERC-20 and BEP-20 are the most commonly discussed standards, other token standards have emerged, each with specific features designed for different use cases:
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ERC-721: A standard for non-fungible tokens (NFTs), enabling the creation of unique tokens representing ownership of distinct assets, such as digital art or collectibles.
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ERC-1155: An advancement over ERC-721, this standard allows for the creation of both fungible and non-fungible tokens within a single contract, significantly enhancing efficiency.
- TRC-20: The token standard for the TRON blockchain, offering similar functionalities to ERC-20 and BEP-20 but optimized for the TRON ecosystem.
Conclusion
Understanding token standards is crucial for anyone looking to navigate the cryptocurrency landscape. ERC-20 and BEP-20 are foundational standards that enable the vast array of tokens we see today, each with unique capabilities that cater to various needs. As blockchain technology continues to evolve, we can expect new standards to emerge, fostering innovation and expanding the possibilities for digital assets. Whether you’re a developer or an investor, familiarity with these standards can help inform your decisions and enhance your overall experience in the world of cryptocurrency.