BEP20 is a token standard on the Binance Smart Chain (BSC), which is an extension to the Ethereum ERC20 token standard. This means that just like ERC20 tokens, BEP20 tokens also follow a certain set of rules which enables them to interact with other tokens.
This standard provides a set of rules for developers to follow, including how the tokens can be transferred, how transactions are approved, how users can access data about a token, and the total supply of tokens.
In addition, BEP20 also allows a token to be a “native” token on BSC, or to be pegged to a certain value if it’s a synthetic token, such as a stablecoin. This capability adds more utility to tokens on BSC compared to those on Ethereum.
For instance, tokens that are based on this standard can be sent, received, staked, used for payments, for governance, and more.
It’s important to note that while BSC is compatible with tools and components used by Ethereum, such as the Metamask wallet or the Solidity programming language, BEP20 tokens operate on BSC’s own network and therefore need BNB (Binance Coin) for transaction fees, not ETH.