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What is an ERC-404 Token Standard?


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Every cryptocurrency has a standard that defines its behavior on blockchain networks. Token standards are best described as the body of rules and protocols that governs the functionalities of crypto coins. As more cryptocurrencies continue to rock the market, the number of standards are increasing too. Examples of some of the most popular standards are ERC-20, BEP-20, ERC-721, ERC-777, ERC-1155, ERC-404, and more.

Although ERC-404 is a new token standard, it has become a bit popular, thanks to its ability to combine the features of ERC-20 and ERC-721. This standard was developed by pseudonymous developers “ctrl” and “Acme.” Like ERC-20 and other ERC standards, ERC-404 is for digital assets on the Ethereum blockchain. This token standard is quite unique because it enables the creation of “semi-fungible” tokens. Prior to the emergence of this standard, NFTs were non-fungible. This simply means it was impossible for investors to own a fraction or fractions of a collection.

However, the emergence of the ERC-404 standard has put an end to that limitation, leveraging the powers of token mint and burn mechanics to bring about fractional ownership of NFTs. Every issued token is linked to a given NFT. According to its pseudonymous creators, the objective is to come up with an NFT possessing native fractionalization, liquidity, and “encourages some aspects of trading/engagement to farm unique trait sets.”

There are also insinuations that the standard supports NFTs to enjoy a token price that complements their floor price in real time. Nevertheless, it should be emphasized that this standard is still at its experiment state as of press time. Hence, it has not been submitted for review or fully audited. Since its proposal has yet to be submitted nor reviewed, many NFT marketplaces have not started supporting it.

Examples of ERC-404 Tokens

Pandora entered the cryptocurrency market as the first ERC-404 token standard that offers native liquidity and fractionalization for non-fungible tokens. The token gained relevance in the market due to how it aids constant liquidity and semi-fungibility for all assets within the collection. 

Pandora has 10,000 tokens with another 10,000 linked Replicant NFTs. Hence, a Replicant NFT will directly be minted to your wallet when you acquire a PANDORA token from a cryptocurrency exchange. Recently, the project in a bid to aid new use cases and add support for external protocol, announced plans to become open-source and available for public review. 

Likewise, there are plans to fast-track the development of the new infrastructure the project is designing internally. Consequently, Pandora will grant access to its GitHub repository to developers who are interested in the new innovation and are willing to review it. Since its release, Pandora has enjoyed a remarkable increase in hitting impressive price heights. 

Since the new token standard hit the crypto market, we’ve seen a host of projects that followed the footsteps of Pandora to adopt it. De Frogs is another popular project that has adopted the ERC-404 token standard. The collection also consists of 10,000 Pepe the Frog-themed NFTs with a variant of the ERC-404 token standard. According to the project team, De Frogs is designed to be deflationary. Monkees with 100 NFTs is another prominent type of ERC-404 token. 


Meanwhile, the ERC-404 is an unofficial project and it is yet to undergo an Ethereum Improvement Proposal (EIP) review. Also, it has yet to undergo a full external audit as mentioned earlier. We consider this to be a significant setback because most major exchanges may not list these tokens.

Therefore, the euphoria around the project may only take a while before it fades off. At the moment, it may be unwise to jump on these projects. Investors should definitely shun the euphoria surrounding this innovation as its meltdown or failure to make progress can be fatal. 

Olaleye Komolafe
Olaleye Komolafe
Olaleye is a professional reporter with vast experience in web3, cryptocurrencies, and NFT journalism. He enjoys writing about the evolving metaverse sphere and the prevalence in the crypto sphere. Notably, some of his contents have been published in numerous international publications. Away from the crypto world, Olaleye is a political scientist and a lover of football

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