What is the difference between ERC-20, BEP-20 and TRC-20. How to choose a network for USDT?
Let’s break down what these networks are first:
ERC-20 — Ethereum blockchain; TRC-20 — Tron blockchain; BEP-20 — Binance Smart Chain blockchain. These blockchains differ in their compatibility with various platforms and wallets, transaction speed, degree of decentralization, and transaction fee size.
The choice of network for USDT depends on what the stablecoin will be used for.
ERC-20 ERC-20 tokens are among the most popular. They are supported by many exchanges and wallets. Also, such tokens are compatible with most DEXes, unlike TRC-20, since the overwhelming majority of decentralized applications and platforms use the Ethereum blockchain.
The Ethereum blockchain is more decentralized than Tron and Binance Smart Chain:
- Ethereum has several thousand validators;
- Tron has 27 validators;
- Binance Smart Chain has 21 validators.
- Decentralization plays a role in data distribution and the network’s dependence on the operability of specific validators. Since Ethereum uses a huge number of validators, the failure of several, or even hundreds of them, will not affect the network. The remaining validators will handle the load.
The risk of lesser decentralization lies in the control over the network’s operation by its creators. For example, in Binance Smart Chain, validators are chosen by Binance.
The main downside of ERC-20 is the high cost and long transaction times.
TRC-20 TRC-20 tokens are popular due to fast transactions and low fees.
USDT (TRC-20) is supported on most centralized exchanges.
As mentioned, TRC-20 is not compatible with decentralized applications and wallets based on Ethereum. For example, you cannot add USDT (TRC-20) to the MetaMask wallet.
TRC-20 is only supported in protocols and DApps based on Tron, but they are less popular than their Ethereum-based alternatives.
BEP-20 The BEP-20 standard emerged after the creation of the Binance Smart Chain blockchain. BSC is another blockchain in the Binance ecosystem. The first network is called the Beacon Chain.
BSC was developed to integrate smart contracts into the ecosystem. Binance Smart Chain is compatible with the Ethereum Virtual Machine (EVM), allowing developers to easily port their Ethereum-based projects to BSC.
Compatibility also enables easy integration of the blockchain with platforms and wallets developed on Ethereum. For example, BEP-20 standard tokens can be used in MetaMask.
In terms of using USDT, the BEP-20 network is a solution to reduce transaction costs and shorten transaction times. At the same time, the token will be supported on platforms built on Ethereum.
Advantages and disadvantages of networks:
BEP-20 and TRC-20 have high transaction speeds and low fees. ERC-20 transactions are more expensive and take longer to confirm. ERC-20 is the most decentralized. TRC-20 tokens are not supported by protocols and DApps based on Ethereum, while BEP-20 and ERC-20 are supported. BEP-20 tokens are less commonly found on exchanges and P2P platforms. Withdrawal fees:
TRC-20–1 USDT
BEP-20–1 USDT
ERC-20–10 USDT
A reminder of an important rule: USDT cannot be transferred between different networks. If you send USDT through the ERC-20 network to a wallet with a TRC-20 address, the cryptocurrency will disappear, and no one will be able to help return it.
Wallet addresses in different networks differ in their initial characters:
0x for ERC-20 and BEP-20; T for TRC-20. ‼️Always double-check the beginning and end of the wallet address.
1 mistake = irreversible loss of money!
