ERC-20 vs. TRC-20 vs. BEP-20 Tokens: What’s the Difference?
Reading Time: 4 minutesHere, we’ll discuss the differences between the three most popular token standards in the crypto space.
The crypto industry consists of various kinds of coins and tokens. In fact, there are currently over 20,000 cryptocurrencies out there today, which can be pretty hard to keep track of.
But crypto tokens can be categorized into smaller groups, such as ERC-20, BEP-20, and TRC-20. But what’s the difference between these token types, and in what ways are they similar?
What Is an ERC-20 Token?
ERC-20 (short for Ethereum Requests for Comment) is the standard used for creating tokens on the Ethereum blockchain. If you’re somewhat familiar with crypto, you’ve probably heard about Ethereum or Ether. This is one of the most valuable cryptocurrencies on the market, second in popularity only to Bitcoin.
But Ethereum isn’t just a cryptocurrency. It is the native asset of a blockchain that goes by the same name. The Ethereum blockchain is currently the most popular in the world, with over 500,000 active addresses and almost 40,000 daily users.
People use the Ethereum blockchain to build and use decentralized apps (DApps), create and trade NFTs, and create cryptocurrency tokens. Because Ethereum uses the proof of stake consensus mechanism, users can also become validators or stake their funds in pools for rewards.
Most fungible crypto tokens created on the Ethereum blockchain are ERC-20 tokens. For example, if a group of developers created a decentralized platform for borrowing and loaning cryptocurrency, they could develop an ERC-20 token for the governance mechanism. This would allow holders of that token to participate in the platform’s decision-making process.
All tokens created on top of the Ethereum blockchain are known as just that, tokens. However, Ether itself is known as a coin because it is the native asset of the entire blockchain.
Popular examples of ERC-20 tokens include Tether (USDT), Shiba Inu (SHIB), Dai (DAI), Basic Attention Token (BAT), Chainlink (LINK), and UniSwap (UNI).
You should also note that some additional types of token standards exist on the Ethereum blockchain, including ERC-721, ERC-1155, ERC-777, and ERC-4626. These aren’t as well known as ERC-20 tokens but they still have some important uses on the blockchain, as listed below.
- ERC-721: a standard used for non-fungible tokens, or NFTs.
- ERC-1155: a standard used to transfer NFTs efficiently in one transfer.
- ERC-777: a standard for fungible tokens that provides extra functionality, such as emergency recovery.
- ERC-4626: a standard for yield-bearing vaults that represents ERC-20 token shares and allows for easier unification of technical parameters.
What Is a BEP-20 Token?
BEP-20 (short for Binance Smart Chain Evolution Proposal) is the standard used for developing tokens on the BNB Smart Chain. The BNB Smart Chain was once known as the Binance Smart Chain. This name may sound familiar, as Binance is one of the biggest cryptocurrency exchanges in the world.
However, Binance rebranded the Binance Smart Chain ecosystem to the BNB Chain to distance itself from the network and remind users that it is decentralized and run by the community.
The BNB Chain ecosystem consists of two main chains: the BNB Beacon Chain and the BNB Smart Chain. While the BNB Beacon Chain is used for staking and governance, the BNB Smart Chain can be used to develop DApps, create NFTs, and, of course, develop native tokens for projects. It is the BNB Smart Chain that BEP-20 tokens exist on.
As you may have already guessed, the BNB Smart Chain is pretty similar to Ethereum in its applications, though the latter is currently more popular than the former. However, BNB Smart Chain is still a huge player in the crypto and DeFi game, processing over 2.6 million transactions daily.
While BEP-20 is the most common token standard on the BNB Smart Chain, you should also be aware of BEP-721, a standard used for NFTs within the ecosystem. Examples of popular BEP-20 tokens include Binance Coin (BNB), PancakeSwap (CAKE), Binance USD (BUSD), and THORChain (RUNE).
What Is a TRC-20 Token?
TRC-20 (short for TRON Request for Comment) is a token standard on the TRON blockchain. The TRON blockchain is another example of a platform on which people can create DeFi projects, DApps, NFTs, and tokens. There are also various services existing on this blockchain, such as the JustSwap exchange, that you can use in your crypto dealings.
The TRON blockchain’s native cryptocurrency is TRON (TRX), which is also a TRC-20 token. However, because this is a crypto with its own blockchain, it is often considered a coin. Examples of TRC-20 tokens include BitTorrent (BTTC), JUST (the native token of JustSwap), Klever (KLV), and Centric Cash (CNS).
Since the TRON blockchain isn’t as commonly used as the BNB Smart Chain and Ethereum blockchain, you may not have heard of these assets before. But know that this is still a popular and promising blockchain that may increase in prevalence in the coming years.
Like the two previously discussed blockchains here, TRON has a standard for NFTs known as TRC-721. However, the network also has another token standard known as TRC-10, which plays a role in token production.
Unlike TRC-20, TRC-10 tokens aren’t dependent on the Tron Virtual Machine (TVM). In fact, TRC-10 tokens are the most common on the TRON blockchain as they’re very easy to create. These tokens are commonly used as ICO tokens for TRON-based projects.
Tokens Existing Across Multiple Chains
There are many crypto tokens out there that come in the form of various standards. Take Tether (USDT), for example, a popular stablecoin. Tether exists on Ethereum, TRON, and the BNB Smart Chain. This means that Tether comes in the form of all three token standards and is compatible with all three chains.
This is also the case for USD Coin (USDC), a stablecoin that shares many similarities with Tether. USDC comes in the form of ERC-20, BEP-20, and TRC-20.
But it’s not just stablecoins that can exist across multiple blockchains. Shiba Inu, a token originally developed on the Ethereum blockchain, is also supported by the BNB Smart Chain. Other examples of assets supported by Ethereum and the BNB Smart Chain are Uniswap (UNI) and Basic Attention Token (BAT).
Token Standards Play an Integral Role in the Crypto Industry
Though the varying token standards out there may seem a little confusing, keep in mind that each type plays an important role in its native ecosystem.
Whether it’s used for fungible tokens, non-fungible tokens, or in functionality, it forms a crucial cog within the complex machine that is blockchain technology.
Ref: makeuseof