Moving from BEP20 to ERC20: Is It Safe?

If you’re a cryptocurrency investor or trader, you’ve probably encountered tokens on both the BEP20 and ERC20 standards. But what if you want to transfer a coin from one standard to the other? Is it possible, and is it a good idea?

In this article, we’ll explore the process of transferring a coin from BEP20 to ERC20 and what you should consider before doing so.

Pros and cons of using BEP-20 vs ERC-20

BEP20 Pros:

• BEP20 token standard or chain is fast in processing transactions.
• It is a multi-chain compatible token standard.
• BEP20 offers a low transaction gas fee to users of the network.
• It offers a provision for developers who wishes to build and deploy smart contracts on a lost cost fee, unlike the ERC20 network. 
• BEP20 Chain services allow developers and investors to gain a high number of feats in terms of finance.

BEP20 Cons: 

• The BEP20 chain is yet to be widely used for building DAAPs, just like the ETH who has so many dAAps built on its network.
• A major flaw of the BEP20 network is its centralization, according to reports the BEP20 network poSA (Proof of stake and activity.) is the point of the network failure.
• The BEP20 chain lacks a blockbuster Defi protocol or project that can bring about more adoption of the chain to builders, as in the case of the ERC20 chain which has an Nft marketplace built on its “OpenSea”.
• Hence the BSC chain was originally created from GOETH (Geth) It is said to be overly dependent on the Ethereum network.
• The BEP20 network operates a deflationary token system and this usually leads to an in-balance in the tokens because they are burnt almost every day.

ERC20 Pros: 

•  ERC20 network has a High traction blockchain for builders.
• It has gained more users and developers over the last 4 years.
• ERC20 tokens are highly fungible.
• ERC20 tokens are very flexible and interchangeable as well.
• Over time the ERC20 token standard has gained mainstream.

ERC20 Cons: 

• High gas fees for transactions.
• Slow transaction time.
• The ERC20 network is poor in scalability, this is due to the congestion on the ETH chain.
• Less effort in token development, and might lead to a scam. In other words, anyone can create an ERC20 token in less than 20-30 mins.
• ERC20 tokens are deflationary.

Is it OK to transfer a coin from BEP20 to ERC20?

It is not safe to transfer a coin from BEP20 to the ERC20 network, this is because they are two different networks and operate on a different chains with different functions. Sending your BEP20 token or coin to an ERC20 address can lead to a loss of funds. The only means this can be achieved is if you bridge your BEP20 token from the BEP20 network to the ERC20 network using a common bridge that functions on an EVM system. However, it is not certain, but it can be achievable.

BEP20 and ERC20: What’s the Difference?

There are huge differences in regard to these networks, their differences are clear to anyone who understand how blockchain network functions. The BEP20 network is built on the BSC blockchain with a poSA functionality, plus its cross-chain compatibility and low transaction fees not excluding its fast transaction processing ability. 

The ERC20 network on the other hand is built on the ETH blockchain for a reason to solve the scalability issues facing the Bitcoin network, it has a higher gas fees system due to the congestion on its network, slow transaction block time, and the ERC20 network is very scalable in all direction but lacks basic transaction features. The above listed are nothing but a few differences between both the BEP20 and ERC20 networks.

Can You Transfer a Coin from BEP20 to ERC20?

Absolutely, No. You cannot transfer a coin or any form or token built on the BEP20 network to an ERC20 network. In common sense, this will definitely lead to the loss of your coin or money. This does not mean it cannot be achievable, it can only be if the project is a cross-chain built project. Meaning it is built on both the BEP20 and ERC20 networks. Also, it can be bridged from the BEP20 network to the ERC20 network as stated above.

Considerations before Transferring from BEP20 to ERC20

• You must ensure that the BEP20 project token you are about to transfer from BEP20-ERC20 is built on a cross-chain method.
• It has a common bridging network.
• They offer the same utility and serve the same purpose on the project protocol.

Token Availability and Compatibility

Both BEP20 and ERC20 tokens are widely available and can be traded and purchased on DEXs like pancakeSwap, UniSwap, 1Inch, BabySwap, and Velodrome dex. Not excluding CEXs like Binance, Kucoin, Bigert, MEXC global, etc. In terms of compatibility, BEP20 has been confirmed to be compatible with BEP2, and as well offers a cross-chain feature. The ERC20 token standard is great on its own operating system with amazing features that are offered.

Transaction Fees and Speed

BEP20 has a very fast speed in processing large and small amounts of transactions. At a very cheap rate gas fee. The BEP20 network process transaction within 3 secs. The drawback of the ERC20 network is its high transaction fees and congestion in its blockchain and this slows down transaction time on each block before confirmation.

Liquidity and Trading Volume

Over time we have seen ERC20 tokens gain more trading volume than BEP20 tokens, with the massive influx of liquidity into the network. This is because the ETH blockchain or network is are builders’ network.

There are over 5,000 plus Defi protocols, Including the NFTS projects, Metaverse projects, Gaming projects, and other forms of Dapps on the Eth blockchain. These projects have their governance tokens that run on the ETH network with daily transactions of thousands of USD.

Tax Implications

Since this system is more of a decentralized system and not a centralized operation forum where the government has to come in and make laws and policies that include tax payment. There are no forms of tax payment on a decentralized system aside from gas fee payment for the purpose of the transaction. Aside from the Binance centralized exchange having issues with the US FED and facing investigation.

Future Developments and Plans

We are now in a world of innovation and new technologies like we have the blockchain today. And there are more to come, more to be uncovered from both the BEP20 and ERC20 network as technology never dies but instead evolves, to become something better and more efficient.

Risks and Challenges

Infact, there have been risks and challenges facing these new technological monetary systems and we are going to look into that.

The BEP20 network recently faced a hack on its chain from a bridge.

The ERC20 network has faced countless hacks over time and this is the core problem plaguing this space. Nevertheless, since it is a new tech that is still in its infancy it is said that this is bound to happen. 

Fake and scam project that has scammed investors off their hard-earned monies.

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