ERC-404 is a new experimental token standard built on the Ethereum blockchain. It aims to combine the functionalities of ERC-20 tokens (fungible tokens) and ERC-721 tokens (non-fungible tokens, or NFTs) into a single standard
Key Features of ERC-404:
- Hybrid functionality: ERC-404 tokens can represent both fungible and non-fungible assets, offering flexibility for various use cases.
- Native liquidity: Unlike traditional NFTs, ERC-404 tokens have built-in liquidity mechanisms, allowing for easier trading and fractional ownership.
- Programmable scarcity: The supply of ERC-404 tokens can be dynamically adjusted through code, enabling innovative tokenomics models
How ERC-404 Works:
When a full ERC-404 token is held in a wallet, one NFT of the underlying project is awarded. When the token is sold, the NFT is automatically burned. Both the tokens and NFTs can be traded independently
Safety of ERC-404:
ERC-404 is an experimental standard and has not undergone a full external audit. While it has been extensively tested, it is important to note that it is not vetted and has not followed the traditional Ethereum Improvement Proposal (EIP) route
Projects using ERC-404:
Currently, two projects have implemented the ERC-404 token standard: Pandora and DeFrogs. Pandora, which uses both ERC-721 and ERC-20 standards, has seen a significant surge in price since its launch on February 2, 2024 DeFrogs is another project leveraging ERC-404 and has experienced substantial growth
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