New Ethereum standard ERC-404 gains steam, first token skyrockets 12,000% in days
ERC-404’s build seeks to merge cryptocurrency and NFT functionality, but Ethereum observers are concerned about gas optimization and rug pulls already taking place.
Pandora, the first asset under an experimental Ethereum (ETH) standard dubbed ERC-404, pumped some 12,000% in less than a week on the back of hype and speculation surrounding the new development.
The asset opened trading around $250 on Feb. 3 and grew to over $30,000 per token by Feb. 9, per Dextools data. This token has attracted $80 million in trading volume in 24 hours and has a supply of 8,000 coins.
Due to its initial success, Binance and OKX crypto exchanges activated support for ERC-404 assets on their web3 wallet services, further bolstering attention paid to this emerging standard.
Other development teams behind tokens like Monarch and DeFrogs have also bought into the hype, fielding tokens built with the standard and even allocating a portion of supply to Pandora holders.
ERC-404 explained
The ERC-404 is an intersection between ERC-20, the de facto standard for cryptocurrencies issued on Ethereum, and the ERC-721 design employed by non-fungible tokens (NFTs), per the team’s GitHub repository.
ERC404 is an experimental, mixed ERC20 / ERC721 implementation with native liquidity and fractionalization. While these two standards are not designed to be mixed, this implementation strives to do so in as robust a manner as possible while minimizing tradeoffs.
Pandaora GitHub
This unofficial decentralized architecture seeks to combine characteristics from both sectors, allowing developers to mint fractionalized NFT collections that users can trade in open markets like Uniswap.
Fractionalized NFTs already exist but they require creators to lock the underlying digital collectible in a vault and issue derivative tokens for each NFT. This comes with a liquidity crunch and the issued tokens sometimes lose price parity with the NFT’s market value.
The ERC-404 standard hopes to solve this by injecting added liquidity into NFTs and enabling multiple users to own a single NFT. While the standard is currently unofficial, meaning it is not yet recognized by the Ethereum foundations, there are rumors of a proposal to address this and unlock extra utility such as staking.
