The newest token standard on the block, ERC404, integrates features of ERC20 and ERC721 standards. The experimental standard has been gaining lots of traction in the crypto space, with a staggering $87 million in trading volume on decentralized exchanges within the first week.
Moreover, almost $1 million worth of ERC404 tokens have been traded on non-fungible token (NFT) marketplaces. So what exactly is ERC404 and why is generating a lot of interest?
The Birth Of Pandora?
Pandora, the first project developed on the ERC404 standard, provides a distinct integration of 10,000 associated “Replicant” NFTs and 10,000 ERC-20 tokens.
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Introducing Replicants – generative avatars bound to Pandora tokens and enabled by ERC404. pic.twitter.com/HiU39hn7dh
— Pandora (@Pandora_ERC404) February 2, 2024
What makes the project unique is the dynamic relationship between the NFTs and tokens. For each full PANDORA token bought on an exchange, 1 Replicant NFT is minted to the buyer’s wallet. On the flip side, selling 1 PANDORA token results in the linked NFT being burned.
This develops a continuously fluctuating market for the distinct Replicants. On that note, the demand for the tokens and non-fungible tokens has been exploding since its launch.
Integrating The Best Of ERC20 and ERC721
ERC404 might still be in its early stages, but it is also showing lots of potential. By integrating the rules of ERC721 and ERC20, the standard enables every Replicant to have the properties of a token and an NFT. This is a considerable deviation from fractionalized NFTs, which only support the partial ownership of an NFT.
Additionally, ERC404 enhances liquidity for NFTs by allowing users to sell tokens on popular decentralized exchanges such as Uniswap, which has considerable liquidity. When a fungible token connected to an NFT is sold, the NFT gets destroyed, developing a dynamic market for the rare Replicants.
The Future Of ERC404
It is not a surprise that ERC 404 has already generated massive trading volumes and considerable fees for liquidity available on Uniswap. Marketplaces such as Blur have rapidly integrated this standard, with other platforms and NFT projects following suit. The potential for ERC404 is endless, and it is just a matter of time before more projects adopt the standard.
The Takeaway
Eventually, ERC404 is an innovative step towards merging the features of ERC721 and ERC20 standards. With its first project, Pandora, already making waves in the crypto community, it is not a doubt that the new token standard has massive potential.
As more platforms and projects integrate ERC404, we can expect even higher trading volumes and a dynamic market for rare NFTs. Ensure to keep an eye out for the new standard as it continues to shape the whole world of NFTs and crypto.
