What is the ERC-404 token standard: revolution or failure?
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The new ERC-404 token standard presents promises and uncertainties for traders and digital art enthusiasts. But is it a reliable solution? The experimental ERC-404 standard aims to solve the liquidity problem of NFT collections. It merges the characteristics of ERC-20 fungible tokens with ERC-721 non-fungible tokens. ERC-20 serves as a protocol standard governing token issuance on the Ethereum network, facilitating the exchange of tokens based on predefined rules. Conversely, ERC-721 operates as a standard for non-fungible tokens, enabling developers to tokenize ownership of various data on the Ethereum blockchain using Solidity language. Typically, ERC-20 and ERC-721 standards cater to fungible assets like currencies and unique collectibles, including digital art. However, this categorical division complicates the sharing and swift exchange of specialized digital assets. Understanding the ERC-404 standard: what we know so far Developers introduce the ERC-404 standard as a fresh protocol aimed at merging the desirable traits of ERC-20 fungible tokens and ERC-721 non-fungible tokens (NFTs). Its primary goal is to address the liquidity challenges NFT collections face and enhance their utility within the defi ecosystem. How does ERC-404 work? ERC-404 represents a contract template designed to facilitate transactions involving both ERC-721 and ERC-20 tokens. This contract does not alter the parameters of existing standards but rather facilitates transactions across different asset types. It’s important to acknowledge that ERC-404’s recognition by the Ethereum Foundation or the broader community is still pending. ERC-404 projects Pandora In early February 2024, Pandora debuted as the inaugural ERC-404 coin. It operates with two assets: an ERC-20 fungible token (PANDORA) and a non-fungible ERC-721 token known as the Replicants collection. The Pandora project issued a total of 10,000 ERC-404 tokens, each linked to a unique NFT within the Replicants collection. These NFTs, depicted as colored boxes called Replicants, come in five different colors, each representing…
Filed under: News - @ February 21, 2024 2:16 am