What is CAP-20?

In the blockchain world, xxx-20 refers to token standards inspired by ERC-20. For instance, BEP-20 is the standard token for Binance Smart Chain (BSC), and CAP-20 is the equivalent of ERC-20 for Chiliz Chain.

First, what is ERC-20?

ERC-20 is the most common token standard on the Ethereum blockchain.

A token standard is a set of rules that tokens must follow to work properly on Ethereum. These rules include how the tokens can be transferred/spent, how transactions are approved, how users can access data about a token, and the total supply of the token.

This ensures that different tokens can interact with each other in a predictable way on Ethereum, making it easier for developers to create new tokens that will work well with wallets, exchanges, and other smart contracts.

In simple terms, ERC-20 is like a common language that all tokens on the Ethereum network use to understand each other and work together smoothly.

Now, what is CAP-20?

Chiliz Advancement Proposal (CAP-20) is a token standard for Chiliz Chain, taking inspiration from ERC-20.

CAP-20 describes tokens that are specifically built for Chiliz Chain. While it follows the ERC-20 basic features, it can support a wider range of tokens. CAP-20 is therefore an extension of ERC-20.

Likewise, ERC-20 tokens require the use of the Ether (ETH) cryptocurrency as gas, while CAP-20 is build instead on the Chiliz (CHZ) cryptocurrency. This is in order to incentivize validators on the Chiliz network.

Tokens created on different blockchain platforms can be adjusted or linked to the Chiliz Chain through a process called "pegging", or bridging. Learn more about Chiliz Bridge.

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