Binance Smart Chain (BSC) is a blockchain-based decentralized exchange platform that allows anyone to build and launch their own digital token. The platform offers its users a rich, rapidly growing ecosystem of digital assets.
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Reasons for Introducing BSC
Binance, one of the largest cryptocurrency exchanges in the world, is committed to increasing the adoption of blockchain technology through a number of projects. In order to increase the adoption of blockchain technology, Binance has decided to create a decentralized exchange (DEX) that will be able to support automated transactions and smart contracts on its own platform. This is the reason why Binance introduced Binance Smart Chain (BSC), which is the foundation for its DEX project.
The Binance Smart Chain BEP20 interconnection sets some strong precedents for creating autonomous blockchain platforms to facilitate web3 development. The Binance Chain was launched in order to enable faster transactions on the Binance exchange, but it created issues around network congestion. The flexibility of the Binance Chain for allowing faster transactions led to a need for a platform that could accommodate smart contracts alongside automated transactions; this need was met by the introduction of Binance Smart Chain (BSC), which is the foundation for the DEX project of Binance.
Dual Chain Architecture
Binance’s dual-chain architecture is a major step forward in blockchain technology.
Binance Chain is a private chain that runs on Ethereum Virtual Machine and can be used to port dApps or use MetaMask to interact with it seamlessly. The public chain, Binance Smart Chain Protocol (BSC), is a variant of Ethereum’s proof-of-stake algorithm that uses BNB coins to power the network. Validators must stake BNB coins and validate blocks in order to secure the network, earn transaction fees from every block they validate, and receive incentives for doing so. As Binance conducts regular coin burns to reduce supply and increase value, these incentives become even more attractive for holders.
BEP2 and BEP20
You might be wondering, "What are BEP2 and BEP20 tokens?"
They're the two different token standards that you'll need to use depending on which chain you want to interact with.
Binance Chain uses its native BEP2 tokens on its blockchain ecosystem, but if you want to interact with any dApps on the platform, then you’ll need to use the BEP20 token.
Binance Smart Chain uses the BEP20 token as well, but it also supports Binance DEX and other decentralized exchange protocols. It is important to note that both of these chains are compatible with each other so that they can be used seamlessly together—you don’t need to worry about having to choose one or another.
Parameters in BEP20 Token Standard
The definition of BEP20 tokens may seem straightforward, but understanding the different standards and parameters behind them can help you determine which functions they will have in your project. The parameters include:
The “Blacklist” parameter helps to blacklist or ban a dubious token address or other malicious addresses.
- Can Mint
The “Can Mint” parameter serves as the inflationary parameter for the BEP20 standard, providing specifications regarding possibilities for minting new tokens to increase the supply.
- Can Burn
In contrast, the “Can Burn” parameter is a deflationary component of the BEP20 standard and can be used to burn tokens, reducing supply.
- Can Pause
The “Can Pause” parameter is an innovative and useful safeguard against malicious attacks. In event of any malicious attack or network downtime, users can pause all operations on the BEP20-based platform until further notice. However, this mechanism is centralized and requires approval from a system administrator before it can be enacted by users.
BEP20 vs ERC20
The BEP20 token standard is one of the most popular token standards used in the blockchain industry. It was designed for use on the Ethereum network and was built with ERC20 in mind. As such, it shares many similarities with ERC20, including these functions:
- The “totalSupply” Function — This function returns the total number of tokens in a smart contract.
- The “balanceOf” Function — Provides information regarding the number of tokens available within a user’s address.
- Name — Adds a human-readable name to the token you are creating.
- Symbol — Creates the ticker symbol for your token.
- Decimal — Sets the divisibility of your token. Therefore, it sets the number of decimal places it can be divided into.
- Transfer — Enables the transfer of tokens among BSC users. It specifically requires that the invoking party also is the owner of the token.
- The “transferFrom” Function — Used to automate transfers by approved persons or approved smart contracts. In this case, you may allow subscriptions or other parties to automatically deduct payments from a wallet or an account
- Approve — A function that limits the amount or number of tokens withdrawn from your balance by any smart contract.
- Allowance — A function that checks the unspent portion of a transaction after an authorized smart contract has spent a certain amount of your tokens.
BEP20 and ERC20 tokens have some key differences.
One of the biggest differences between BEP20 and ERC20 is that BEP20 tokens must have the “getOwner” function, while ERC20 tokens do not. The “getOwner” function returns the owner of a BEP20 token, which means it provides information about who owns what at any given time. This can be used to know whether or not to send funds to someone who may not have access to them yet, or if you need to make sure someone else has given you permission to use their funds before moving forward with a transaction like sending money or booking a room for them at your business.
Another difference between BEP20 and ERC20 is that name, symbol, and decimal functions are all optional on an ERC20 token but mandatory on a BEP20 token. This means that while you could choose not to include those fields in your ERC20-compliant token and still be valid in terms of being able to trade it on exchanges (which are required by law), if you want your BEP compliant token traded on those exchanges then it needs those fields included as well.