A BEP-20 token is essentially a blueprint for tokens to follow so that they can be easily exchanged with other BEP20 tokens. The "BEP" in BEP-20 stands for Binance Ecosystem Proposal. Just like any other token standard, a BEP-20 token must strictly follow rules and guidelines set forth in terms of the token’s contract.
BEP-20 tokens facilitate smart contracts for tokens on the Binance Smart Chain and relate to numerous applications in fields such as Decentralized Finance (DeFi) and Non-Fungible Tokens (NFTs). Here are why they are vital:
Creating a BEP-20 token does not require deep understanding of blockchain technology. Anyone can create their own BEP-20 token on Binance Smart Chain. Here are the general steps:
However, launching your own token should be accompanied by a concrete business plan and a purpose for its existence. Creating one just for fun may bring unnecessary risks.
Decentralized exchanges (DEX) like PancakeSwap use smart contracts and blockchain technology to facilitate direct, peer-to-peer transactions. All tokens that you trade on these DEX platforms must comply with BEP-20. It means if you're buying or trading a token on a DEX that runs on Binance Smart Chain, it's a BEP-20 token.
Overall, BEP-20 tokens are a critical element in the Binance Smart Chain ecosystem. They work as the functional unit that enables the BSC to interact with other tokens and decentralize applications. Without BEP-20, the ease with which we can build and integrate projects on the Binance Smart Chain would not be possible.