BEP20 Token Development
BEP-20 is a Binance Smart Chain token standard that extends the functionality of ERC-20 and BEP-2 tokens by allowing you to transfer your tokens between different blockchains and beyond Binance.
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Key Attributes
This feature permits the restriction of specific BEP-20 addresses considered suspicious or harmful.
This parameter oversees the generation of new tokens, assisting in the growth of the total coin supply within the system.
This function provides the means to eliminate tokens, effectively diminishing their overall quantity.
This feature offers protection against potential security threats by enabling users to suspend all activities related to BEP-20 tokens.
The protocol necessitates the inclusion of the getOwner function, which identifies the owner of the token.
Key Benefits
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Essential Interface Requirements
The protocol requires the integration of eleven specific functions within a smart contract to conform to the standard. These functions encompass retrieving the total supply of tokens, verifying account balances, facilitating token transfers, and authorizing other contracts to access tokens, among others.
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MetaMask Integration
BSC users can manage their tokens using the MetaMask wallet. This compatibility allows users to interact with their BEP-20 tokens through the familiar MetaMask interface, making token management and exchanges more straightforward.
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Decentralized Exchange Support
The standard enables tokens to be utilized on decentralized exchanges operating within the BSC network. This functionality allows users to trade or exchange their BEP-20 tokens without the need for centralized exchanges.
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Improved Audit Features
BSC offers tools for the auditing and verification of smart contracts that comply with the standard. This enhances the security and trustworthiness of tokens developed within this framework.
In the cryptocurrency arena, a token signifies a digital asset that operates on a blockchain. Developers have the flexibility to embed various features tailored to meet the unique demands of their projects and the broader ecosystem.
Tokens can be understood as digital representations of value. Depending on their categorization, they may function as straightforward cryptocurrencies akin to conventional currency or as digital surrogates for tangible assets, such as gold. Several distinct types of tokens merit further exploration.
Main Types of Tokens
Utility Tokens
These tokens grant holders access to specific products or services within the project’s ecosystem. For example, utility tokens can be used to pay transaction fees, receive discounts, or unlock certain functionalities in decentralized applications.
Security Tokens
These tokens give holders rights to a portion of a company’s profits or assets, rendering them similar to traditional securities like stocks.
Investment Tokens
Developers issue these tokens during an Initial Coin Offering (ICO) to gather funds. Under established guidelines, holders may benefit from an increase in token value or receive a share of the issuer’s profits.
Token Specifications
Token specifications are a set of technical standards and guidelines that define the design and functionality of tokens issued on a particular blockchain platform. They establish a framework for creating and utilizing tokens, enhancing accessibility and transparency of digital assets for both users and developers.
These specifications detail uniform protocols for various operations, such as creating, transferring, storing, and managing tokens. They also outline essential methods and functions necessary for token interactions, including token transfers, balance checks, and executing different tasks within the blockchain environment.
Importance of Token Specifications
Token specifications are vital for the advancement of the cryptocurrency ecosystem, providing several significant benefits:
Compatibility and Interoperability
Due to standardized coding, tokens developed on one blockchain can easily interact with applications and wallets that adhere to the same standards. This allows members of the crypto community to transfer assets across different platforms seamlessly, as long as those platforms support the relevant token specifications. Additionally, these standards equip developers with readily available tools and resources for building diverse applications and services that utilize digital assets. The clarity and transparency of these guidelines promote growth within the blockchain sector.
Security and Reliability
Token specifications enhance transaction security by establishing rules for data validation, encryption, and checks on transaction authenticity. This framework helps reduce fraud and safeguard assets.
User Experience
Specifications simplify user interactions with tokens. Users benefit from a clear and organized framework that supports them in managing transactions involving their assets.
The BEP20 Network
In 2019, the team behind a prominent cryptocurrency exchange introduced the Binance Smart Chain (BSC). Following a spike in interest in decentralized finance (DeFi) in 2021, developers identified the need for enhancements to the network. They established a parallel Binance Smart Chain capable of supporting smart contracts. To enable the swift creation of new tokens, the BEP20 protocol was launched. BEP-20 serves as a counterpart to ERC-20 tokens, specifically designed for the Binance blockchain—BNB Smart Chain (BSC). It is built on Ethereum’s code, ensuring compatibility with Ethereum. Participants in this network can deploy smart contracts quickly and affordably, with the BEP20 framework offering significantly higher transaction throughput than Ethereum while maintaining fees below $0.01.
Understanding the BEP20 Protocol
The smart contract standard defines the rules for creating custom crypto assets. The most widely used are ERC tokens on the Ethereum chain. To facilitate the development of decentralized applications (dApps) and enhance the use of coins in DeFi, Binance Chain developers rolled out the parallel BSC chain, which operates on the Ethereum Virtual Machine (EVM) and enables the creation of Ethereum-compatible applications.
The BEP20 protocol is an enhanced version of ERC-20, with both being nearly identical. However, the BSC blockchain offers greater throughput and lower fees. Thanks to its compatibility, dApp developers can build projects on BSC and later migrate them to Ethereum. The Binance Smart Chain test environment allows for free debugging of algorithms. The BEP-20 standard was established to enable participants to swiftly issue tokens and promote their projects, while dApp developers can secure initial funding through private sales.
Features of BEP-20 Tokens
Any user with basic programming knowledge can generate BEP-20 cryptocurrencies using a template. Unlike standalone coins, tokens do not necessitate substantial funding or a dedicated development team for launch. These assets exhibit the following characteristics:
Rapid and Affordable Transfers: Block creation occurs every 3 seconds, with minimal transaction fees (less than $0.01).
Integration into a Growing Ecosystem: Tokens function within a robust ecosystem with millions of participants.
Support from Major Exchange: Binance supports these tokens.
Cross-Chain Functionality: The cross-chain mechanism enhances asset capabilities.
Differences Among BEP20, BEP2, and ERC20
The establishment of token standards has simplified the creation of new cryptocurrencies. Developers no longer need to build a blockchain from the ground up; they can leverage the infrastructure of established chains. Standardized assets can be easily exchanged for native coins within their networks.
ERC-20: A set of rules for smart contracts on Ethereum.
BEP-2: A technical protocol for asset launches on Binance Smart Chain, lacking smart contract support.
BEP-20: Developed following the introduction of the parallel chain, it is technologically similar to ERC-20 but operates on BSC.
Token Types on the BEP20 Network
The BSC network gained popularity in 2021 amid soaring Ethereum fees (which peaked at $100). Users can utilize:
Coins issued on the Binance Chain.
BEP-20 tokens.
Major assets from other networks (e.g., Bitcoin, Ethereum, Tether), which can be transferred via the BEP20 network, reducing fees by $3-4 when sending Bitcoin.
Pegged Tokens
Pegged tokens refer to assets whose value is linked to original cryptocurrencies. Tokenized versions of BTC, ETH, USDC, USDT, and other coins are available on the Binance Smart Chain. These tokens facilitate trading on decentralized exchanges (DEX), inexpensive transfers, earning on lending platforms, and liquidity farming.
On the BSCscan explorer, users can access a list of tokenized assets along with contract addresses, holder counts, and market capitalization.
Target Audience for Tokens
Tokens are often launched by entrepreneurs developing new projects in the DeFi space. Developers produce a White Paper outlining their idea and distribute cryptocurrency to users, allowing them to secure initial funding and grow the project. If the dApp succeeds, developers and early investors can achieve significant profits.
BEP-20 assets are also favored by business professionals seeking transaction reliability. By encoding all conditions in the code, issuing a coin (which can be linked to fiat or major cryptocurrencies), and deploying the algorithm, they can ensure transaction security.
Advantages and Disadvantages of the Binance Smart Chain
The BSC network is rapidly evolving due to investments from Binance Labs, user-friendliness, and appealing project launch conditions. It emerged as a viable alternative to Ethereum, which is known for costly transactions. BSC employs an upgraded Proof-of-Stake (PoS) algorithm called Proof-of-Authority, supported by 21 validators selected by Binance. This enables quick transactions at low costs.
Advantages: Low fees, integration with dApps, fewer project launch requirements compared to Ethereum, and backing from the Binance exchange.
Disadvantage: Limited decentralization of the network.
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