ERC-20 vs TRC-20 vs BEP-20: What are the Major Differences?

In a few years, blockchain technology has become very popular, and it is being used in several sectors, including healthcare, education, Tech, commercial, etc. It also brings new opportunities for other sectors as gaming has evolved with the introduction of blockchain technology. Now, it has become fairer and more trustworthy. 

Blockchain also introduced a new payment method, modifying how the world spends its money. Cryptocurrencies are getting popular as the day passes, and every day there, people are making new cryptocurrencies. ERC20, TRC20, and BEP20 are token standards, meaning these blockchains are used to create cryptocurrencies. Through this blog, we are going to explore what is the token standard and what are the major differences between ERC20, BEP20, and TRC20.

What are Crypto Token Standards

A token standard refers to a set of rules that states how new tokens will be created, distributed, and used on a specific Blockchain. One example is ERC20, a standard for developing tokens on the Ethereum network. It allows developers to create their crypto tokens on the Ethereum blockchain network. All ERC20 tokens have similar characteristics and will be governed by the same regulations. In addition to the ERC20 token standard, there are other well-known token standards such as BEP-2, BEP-20, and TRC-20.

Each Blockchain has the potential to establish its unique token standard. The Ethereum platform has three token standards, which are ERC-10, ERC-20, and ERC-721. Developing a cryptocurrency is very complex because it requires a lot of knowledge, technology, time, and much more. ERC20, TRC20, and BEP20 are popular blockchain networks for developing new coins. Developing a coin is a complex process for any business; that’s why several experts in the market offer the best coin development service, and it is the Smart crypto solution.

The smart crypto solution is a crypto and blockchain development company in Jaipur that is an expert in developing all Web3 platforms. They have several teams of experts for each of their services, to whom they train with updated technology as needed. It is one of the known crypto development companies where you’ll get several blockchain options to develop your cryptocurrency. ERC20, BEP20, and TRC20 are major blockchain networks for coin development services, and smart crypto also shares detailed information about the token standard of each blockchain platform.

Importance of Token Standards in Blockchain

Token standards play a crucial role in the functionality, interoperability, and adoption of blockchain ecosystems. These standards define how tokens are created, transferred, and managed on a blockchain platform. They provide a common set of rules and guidelines that developers and users can follow when creating and interacting with tokens. The most well-known token standards are ERC-20, ERC-721, and ERC-1155 on the Ethereum blockchain. 

Token standards ensure that tokens are created and managed in a uniform manner across different projects and platforms. This interoperability is essential for tokens to seamlessly interact with various applications, wallets, and exchanges within the blockchain ecosystem.

Tokens adhering to standardized formats are compatible with a wide range of services, platforms, and smart contracts. This compatibility enables tokens to be easily integrated into various decentralized applications (DApps) and platforms.

Token standards provide developers with clear guidelines for creating tokens. This simplifies the development process, as developers don’t need to reinvent the wheel each time they create a new token. They can leverage existing standards and focus on unique features and functionalities.

Also Read: What is the Future of Cryptocurrency?

Overview of ERC-20, TRC-20, and BEP-20

ERC-20, TRC-20, and BEP-20 are three popular token standards used on different blockchain platforms. Each standard defines a set of rules and specifications for creating and interacting with tokens on their respective blockchains. Here’s an overview of each token standard:

ERC-20 (Ethereum Token Standard)

ERC-20 stands for “Ethereum Request for Comment 20,” and it is the most widely adopted token standard on the Ethereum blockchain. ERC-20 tokens are fungible, meaning each token is interchangeable with another of the same value. ERC-20 defines standard functions for transferring tokens between addresses, checking balances, and approving token transfers on behalf of another address.

TRC-20 (TRON Token Standard)

TRC-20 is the token standard used on the TRON blockchain. Similar to ERC-20, TRC-20 tokens are fungible and are widely used within the TRON ecosystem. TRC-20 tokens are interchangeable, making them suitable for various transactions and applications within the TRON network.

BEP-20 (Binance Smart Chain Token Standard)

BEP-20 is the token standard used on the Binance Smart Chain (BSC), a blockchain that runs in parallel with the Binance Chain. BEP-20 tokens are designed to mirror the functionalities of ERC-20 tokens on the Ethereum network. BEP-20 tokens are compatible with both Binance Chain and Binance Smart Chain, allowing for cross-chain transactions.

Factors to Consider When Choosing a Token Standard

Choosing the right token standard is a crucial decision that can significantly impact the success of a blockchain project or application. Several key factors should be carefully considered:

1. Evaluating the Specific Requirements of a Project or Application

Functionality: Consider the specific features and functionalities required for your project. Different token standards have varying capabilities, such as supporting non-fungible tokens (NFTs) or specialized token functionalities.

Use Case: Analyze the intended use case of the tokens. Some standards might be better suited for gaming, while others are ideal for decentralized finance (DeFi) applications.

Scalability: Evaluate the scalability requirements of your project. Some token standards might offer better scalability solutions, such as layer 2 solutions, for handling a high volume of transactions.

2. Considerations for Developers, Investors, and Users

Developer Familiarity: Consider the expertise of your development team with the chosen token standard. Familiarity can impact development efficiency and the quality of the final product.

User Experience: Evaluate how user-friendly the chosen token standard is for end-users. A seamless and intuitive experience can drive adoption.

Investor Interest: Research investor sentiment and interest in projects using a particular token standard. A standard with strong investor backing can attract funding and attention.

3. Liquidity and Trading Opportunities for Each Token Standard

Exchange Listing: Consider the availability of exchanges that support the chosen token standard. A standard with broader exchange listing options can enhance liquidity.

Trading Volume: Assess the trading volume and liquidity of tokens using the chosen standard. Higher trading volume often leads to better price stability and reduced slippage.

4. Community Support and Ecosystem Development

Community Engagement: Research the level of engagement and activity within the community of developers, users, and enthusiasts supporting the chosen token standard.

Ecosystem Development: Evaluate the growth and development of projects and applications built around the chosen standard. A robust ecosystem can indicate long-term sustainability.

Tooling and Resources: Consider the availability of development tools, libraries, and resources for the chosen token standard. These resources can expedite development and reduce costs.

Understanding ERC-20 Tokens

What are ERC-20 Tokens

ERC-20 tokens are a type of digital asset that adheres to a specific token standard known as “Ethereum Request for Comment 20.” This standard defines a set of rules and functions that enable the creation and management of tokens on the Ethereum blockchain. ERC-20 tokens are fungible, meaning they are interchangeable with each other and represent a specific value.

Purpose of ERC-20 Tokens

The primary purpose of ERC-20 tokens is to provide a standardized framework for creating tokens on the Ethereum blockchain. These tokens can represent various assets, from cryptocurrencies to digital representations of real-world assets. ERC-20 tokens enable developers to build decentralized applications (DApps) that interact with these tokens, facilitating a wide range of use cases such as decentralized exchanges, tokenized assets, voting systems, and more.

Key Features of ERC-20 Tokens

1. Token Supply and Decimal Precision

ERC-20 tokens have a specified total supply, representing the maximum number of tokens that can ever be created. They can also define a decimal precision, allowing for fractional units of the token. For example, if a token has a decimal precision of 18, it can be divided into one quintillion smaller units.

2. Token Transfer Functionality

ERC-20 tokens include standard functions for transferring tokens between Ethereum addresses. The transfer function allows users to send tokens to another address, facilitating peer-to-peer transactions.

3. Token Approval and Delegated Transfer

The ERC-20 standard includes functions like approve and transferFrom that enable token holders to delegate the transfer of their tokens to third-party addresses. This is commonly used in scenarios like decentralized exchanges or DApps where tokens are managed on behalf of users.

4. Token Events and Callbacks

ERC-20 tokens can emit events that notify external applications or smart contracts about specific token-related actions. This enables real-time tracking and integration of token-related activities into other decentralized applications.

Pros and Cons of ERC-20 Tokens

Advantages of ERC-20 Tokens

• Interoperability: ERC-20 tokens can seamlessly interact with various Ethereum-based applications, wallets, and platforms, enhancing their usability.
• Compatibility: A wide range of development tools, libraries, and frameworks support ERC-20 tokens, making it easier for developers to create and manage tokens.
• Liquidity: ERC-20 tokens benefit from being listed on numerous decentralized and centralized exchanges, providing liquidity and trading opportunities.
• Ecosystem: The popularity of ERC-20 tokens has led to the development of a vibrant ecosystem of projects, services, and tools.

Limitations and Challenges of ERC-20 Tokens

• Scalability: High network congestion on Ethereum can lead to slower transactions and increased fees for ERC-20 token transfers.
• Interoperability: While ERC-20 tokens are widely compatible with Ethereum-based applications, cross-chain interoperability remains a challenge.
• Complexity: For users unfamiliar with the technical aspects of blockchain and Ethereum, interacting with ERC-20 tokens might involve a learning curve.

Understanding TRC-20 Tokens

What are TRC-20 Tokens

TRC-20 tokens are a type of digital asset that adheres to the “TRON Request for Comment 20” token standard. This standard is used on the TRON blockchain to create and manage tokens. TRC-20 tokens are fungible, meaning they are interchangeable with each other and represent a specific value within the TRON network.

Purpose of TRC-20 Tokens

The purpose of TRC-20 tokens is to provide a standardized framework for creating and managing tokens on the TRON blockchain. Similar to other token standards, TRC-20 tokens enable developers to build decentralized applications (DApps) that interact with these tokens, facilitating a wide range of use cases such as gaming, decentralized finance (DeFi), content sharing, and more.

Key Features of TRC-20 Tokens

1. Token Supply and Decimal Precision

TRC-20 tokens have a specified total supply that represents the maximum number of tokens that can be created. Additionally, TRC-20 tokens define a decimal precision, allowing them to be divided into fractional units, similar to other token standards.

2. Token Transfer Functionality

TRC-20 tokens include standard functions for transferring tokens between TRON addresses. The transfer function allows users to send tokens to other addresses, facilitating transactions and value transfer.

3. Token Approval and Delegated Transfer

Similar to other token standards, TRC-20 tokens provide functions like approve and transferFrom that allow users to delegate token transfers to other addresses. This is commonly used for scenarios such as trading on decentralized exchanges or interacting with DApps.

4. Token Events and Callbacks

TRC-20 tokens emit events that notify external applications or smart contracts about specific token-related actions. This feature allows for real-time integration of token activities into other decentralized applications on the TRON blockchain.

Pros and Cons of TRC-20 Tokens

Advantages of TRC-20 Tokens

• Interoperability: TRC-20 tokens are compatible with various TRON-based applications and platforms, allowing for seamless integration within the TRON ecosystem.
• Fast Transactions: The TRON blockchain is known for its high throughput and fast transaction speeds, making TRC-20 token transfers efficient.
• Resource Efficiency: TRON’s delegated proof-of-stake (DPoS) consensus mechanism contributes to energy efficiency and lower transaction costs.

Limitations and Challenges of TRC-20 Tokens

Ecosystem Maturity: While the TRON ecosystem has grown rapidly, it may have fewer decentralized applications and services compared to more established platforms.
Network Centralization: TRON’s consensus mechanism, DPoS, is sometimes criticized for its potential centralization, as fewer nodes control block validation.
Interoperability: Like other blockchains, cross-chain interoperability between TRC-20 tokens and tokens on other blockchains can be a challenge.

Understanding BEP-20 Tokens

What are BEP-20 Tokens

BEP-20 tokens are a type of digital asset that adhere to the “Binance Smart Chain (BSC) Ethereum Compatibility Token Standard.” This standard is used on the Binance Smart Chain, a parallel blockchain to the Binance Chain. BEP-20 tokens are designed to mirror the functionalities of Ethereum’s ERC-20 tokens while benefiting from BSC’s high throughput and low transaction fees.

Purpose of BEP-20 Tokens

The purpose of BEP-20 tokens is to provide a standardized framework for creating tokens on the Binance Smart Chain. BEP-20 tokens offer compatibility with the Ethereum ecosystem while leveraging BSC’s network advantages, including faster transaction speeds and lower fees. Similar to ERC-20 and other token standards, BEP-20 tokens enable the creation of various digital assets that can be used within decentralized applications (DApps) and platforms.

Key Features of BEP-20 Tokens

1. Token Supply and Decimal Precision

BEP-20 tokens define total supply and decimal precision, allowing for the creation of tokens with fractional units. These features enable the representation of both whole and fractional values.

2. Token Transfer Functionality

BEP-20 tokens include standard transfer functions that allow users to send tokens to other addresses on the Binance Smart Chain. This functionality facilitates peer-to-peer transactions and value transfer.

3. Token Approval and Delegated Transfer

Similar to other token standards, BEP-20 tokens support functions like approve and transferFrom that enable users to delegate token transfers to third-party addresses. This is useful for scenarios such as decentralized exchanges and DApps.

4. Token Events and Callbacks

BEP-20 tokens emit events that notify external applications or smart contracts about token-related actions. These events enable real-time integration and tracking of token activities within the Binance Smart Chain ecosystem.

Pros and Cons of BEP-20 Tokens

Advantages of BEP-20 Tokens

• Interoperability: BEP-20 tokens offer compatibility with both Binance Smart Chain and Binance Chain, providing cross-chain capabilities.
• Fast Transactions: Binance Smart Chain’s high throughput allows for fast transaction confirmation and reduced congestion.
• Low Fees: The Binance Smart Chain network generally offers lower transaction fees compared to the Ethereum network.
• Ecosystem Growth: BEP-20 tokens benefit from Binance’s wide reach, fostering an active ecosystem of projects and services.

Limitations and Challenges of BEP-20 Tokens

• Security Concerns: Like any blockchain, the security of BEP-20 tokens depends on the overall security of the Binance Smart Chain network.
• Decentralization: Critics have raised concerns about the level of decentralization within the Binance Smart Chain network.
• Competition: As a relatively newer ecosystem, Binance Smart Chain may face competition from established blockchain platforms.

ERC-20 vs TRC-20 vs BEP-20: Major differences

Comparing the three prominent token standards, ERC-20, TRC-20, and BEP-20, provides insights into their respective strengths and considerations for developers, users, and the broader blockchain ecosystem.

Token Development and Deployment

1. Smart Contract Platforms

• ERC-20: Ethereum-based smart contracts power ERC-20 tokens, benefiting from Ethereum’s widespread adoption and robust development community.
• TRC-20: TRC-20 tokens are built on the TRON blockchain, which offers fast transaction speeds and energy-efficient consensus mechanisms.
• BEP-20: BEP-20 tokens are deployed on the Binance Smart Chain, combining compatibility with Binance Chain and fast transactions.

2. Token Creation and Standardization

• ERC-20: ERC-20 tokens adhere to Ethereum’s well-established standard, making them widely compatible with Ethereum wallets, DApps, and exchanges.
• TRC-20: TRC-20 tokens follow TRON’s standard, enabling their integration into TRON-based applications and platforms.
• BEP-20: BEP-20 tokens offer cross-chain capabilities between Binance Chain and Binance Smart Chain, enhancing their interoperability.

Token Functionality and Use Cases

1. Compatibility with Exchanges and Wallets

All three standards are compatible with a variety of wallets and exchanges, facilitating liquidity and trading opportunities.

2. Interoperability and Cross-Chain Support

• ERC-20: Native to Ethereum, cross-chain support requires specialized solutions or token wrapping.
• TRC-20: TRON’s network provides fast transactions but may require bridging for cross-chain interoperability.
• BEP-20: BEP-20 tokens offer native cross-chain capabilities between Binance Chain and Binance Smart Chain.

3. Token Utility and Smart Contract Capabilities

• ERC-20: Ethereum’s robust smart contract capabilities allow for complex token functionality and integration with DeFi platforms.
• TRC-20: TRC-20 tokens leverage TRON’s smart contract capabilities for applications ranging from gaming to content sharing.
• BEP-20: BEP-20 tokens benefit from BSC’s DeFi ecosystem and can be used for various financial applications.

Security and Auditing Considerations

1. Code Audit and Vulnerability Assessments

For all standards, thorough code audits and vulnerability assessments are critical to ensure the security of token contracts.

2. Token Contract Upgradability and Safety Measures

• ERC-20: Smart contracts on Ethereum can be upgraded, but security must be prioritized to prevent vulnerabilities during upgrades.
• TRC-20: Similar to ERC-20, TRC-20 contracts can be upgraded, requiring careful security measures.
• BEP-20: BEP-20 tokens may leverage Binance Smart Chain’s upgrade mechanisms while ensuring code security.

Community and Ecosystem Support

1. Developer Adoption and Community Engagement

• ERC-20: Ethereum’s large developer community and extensive resources foster innovation and community engagement.
• TRC-20: TRON’s growing ecosystem attracts developers interested in its features and fast transaction speeds.
• BEP-20: The Binance ecosystem offers resources, exchanges, and services, contributing to developer engagement.

2. Available Resources and Developer Tools

All three standards have a range of resources, including development tools, documentation, and tutorials, to support developers.

Conclusion

The choice between ERC-20, TRC-20, and BEP-20 tokens depends on factors such as the project’s use case, desired blockchain characteristics, ecosystem support, and developer expertise. Each standard has its unique advantages, and understanding these differences is crucial for making informed decisions in the dynamic world of blockchain development and tokenization.

Even though these standards share several commonalities, there are important distinctions between them regarding blockchain infrastructure, transaction fees, transaction speeds, and ecosystem support. Additional considerations include Blockchain infrastructure, Transaction fees, Interoperability, and Ecosystem and Adoption. When considering which token standard to use, it’s important to evaluate the specific requirements of your project, the target audience, the platform’s capabilities, transaction costs, the level of decentralization desired, and market making is also an essential thing for cryptocurrencies. The smart crypto solution has a complete solution for cryptocurrencies including smart market making and coin listing on CMC and CG.

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