ERC-20 vs TRC-20 vs BEP-20: Comparing the Crypto Token Standards

Introduction

In recent years, blockchain technology has become immensely popular, and so do tokens in its ecosystem. Tokens are digital assets built on top of existing blockchains, offering a wide range of applications. They can be used for several purposes, such as transactions, providing governance and voting rights, representing company shares, or raising funds.

Ethereum, Binance Smart Chain, and TRON are the three most popular blockchains for token development, with ERC-20, BEP-20, and TRC-20 token standards receptively. In this article, we will discuss each of these three token standards, their features, and the development process and compare them to help you better understand and make an informed decision on which one to invest in.

What is a Crypto Token Standard?

Before we dive into ERC-20 vs. TRC-20 vs. BEP-20 comparison, it is helpful to understand the crypto token standard and their types. Crypto token standards are a set of rules, conditions, and functions that defines the working of a token. Basically, token standards specify requirements a token must fulfill to be compatible with the underlying blockchain. It includes guides for creating, minting, deploying, and burning a token.

Crypto token standards are required to track the efficiency and performance of the developed tokens and ensure their interoperability and compatibility with other existing applications.

Types of Crypto Token Standards

Different blockchains can have different and multiple token standards for standardizing functions and parameters of tokens on its blockchain. For instance, the three most popular blockchains with their crypto token standard are:

• Ethereum : ERC-20, ERC-721, ERC-777, ERC-115
• Binance Smart Chain: BEP-20
• TRON : TRC-20, TRC-721, TRX, TRC-10

What is ERC-20, and How does it work? 

ERC-20 is the token standard for creating fungible tokens on the Ethereum blockchain.

The term “ERC” stands for the Ethereum Request for Comment, and the notation “20” is for the 20th proposal, which was proposed by Fabian Vogelsteller in 2015. ERC-20 defines the set of rules and conventions that must be followed by all tokens created on the Ethereum blockchain. The developed tokens on the ERC-20 standard are called ERC-20 tokens. These tokens are fungible, that is each ERC-20 token is equal and indistinguishable from another token. ERC-20 tokens are supported by almost every wallet and can be traded on exchanges. Let’s see the features of ERC-20 tokens:

• Easy and affordable development
• Fast transactions
• Low smart contract risks
• Global popularity and High market liquidity
• Interoperability

How to create an ERC-20 token

If you have a developer background, you can easily create ERC-20 tokens by implementing smart contracts. Smart contracts are self-executing contracts with agreement terms and conditions written into the code. The token development process follows a series of steps, including defining token parameters, setting up a development environment, writing a smart contract, implementing functionalities, and testing and deploying the smart contract. The ERC-20 standard requires 6 code functions to be included in smart contract code for creating ERC-20 tokens.

Coding Functions of ERC-20:

• totalsupply(): Function to return the total supply of tokens created for a particular project.
• balanceOf(): Function to return the balance of tokens held by a particular address.
• transfer(): Function to allow transfer tokens from one address to another address.
• approve(): Function to allow an address to approve another address to spend tokens on their behalf.
• transferFrom(): Function to allow an address to transfer tokens from another address that has approved them.
• allowance(): Function to return the amount of tokens that an approved address can spend on behalf of another address.

Optional functions: Token name, Token abbreviation, Token precision.

Additional Read: Top Ethereum ERC-20 Tokens

What is TRC-20, and How does it work? 

TRC-20 tokens are transferable fungible assets designed to run on the TRON blockchain. The TRC-20 token standard is the blueprint for the functionality and issuance of TRC-20 tokens. TRC-20 tokens are native to the TRON blockchain and can not be transferred to other blockchains in their original form. To use them on other networks, you’ll need a bridge solution to transfer TRC-20 out of the TRON network. The features of the TRC-20 token are:

• Lower transaction fees
• Fast speed
• Compatible with Ethereum
• Interoperability

How to create a TRC-20 token

TRC-20 tokens can be created by anyone who knows the Solidity programming language, following the TRC-20 token standard. TRC-20 token smart contract design is similar to Ethereum’s ERC-20 token. For seamless swapping, transferring, and wallet support, TRC20 tokens must have 6 code functions to ensure compatibility and smooth functionality of all TRC20 tokens.

Coding Functions of TRC-20:

• totalsupply() 
• balanceOf()
• transfer()
• approve()
• transferFrom()
• allowance()
• Transfer 
• Approval

Other optional functions: Token name, Token abbreviation, Token precision

What is BEP-20 and How does it work? 

BEP-20 is an extended version of the ERC-20 token standard for creating tokens on Binance Smart Chain, a blockchain developed by Binance Exchange. The fast speed and cheap cost of Binance Smart Chain have made it an attractive option for building tokens. Moreover, due to its similarity to the ERC-20 token, BEP-20 tokens are compatible with Ethereum. The BSC chain and BEP-20 token combination allow developers to build various dApps and take advantage of the network. 

• Interoperability
• Fast and cheaper than ERC-20 tokens
• Offer cross-chain compatibility
• Simple to create

How to create a BEP-20 token

BEP-20 tokens are relatively easier to create. BEP-20 smart contract design has six required functions to create BEP-20 tokens with some additional parameters, which include “Can Mint”, “Caan Burn”, “Blacklist” and “Can Pause”.

Coding Functions of BEP-20:

• totalsupply() 
• balanceOf()
• transfer()
• approve()
• transferFrom()
• allowance()
• Transfer 
• Approval

Know More: Top Binance Smart Chain Projects

Things to Consider for Crypto Token Development 

• Token Compatibility: Ensure that the developed tokens follow the token standards and are compatible with the underlying blockchain.
• Token Supply: As no altercation can be made to deploy smart contracts, enter the total supply of tokens during its creation.
• Token Issuance: Define the process to issue tokens, whether through minting, staking, or both. 
• Token Burning: Implementing token-burning mechanisms to reduce supply can increase token demand. Hence, specify the approach and extent of token burning if applicable.
• Token Rights: Define the rights associated with owning or holding the tokens, such as governance rights, voting rights, or none.
• Token Listing: Once the token development is complete, it must be listed on exchanges to enable trading opportunities for token holders.

ERC-20 vs TRC-20 vs BEP 20

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