ERC404 as the name is meant to suggest is a protocol which is literally nowhere to be found!. It’s neither in the EIP (Ethereum Improvement Proposals) or ERC (Ethereum Request for Comments), say WHATTT 😅
This experiment is the brain child of github user 0xacme. The repository link to his initial version can be found below.
The creator’s ideology & intent behind the ERC404 standard
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.
In it’s current implementation, ERC404 effectively isolates ERC20 / ERC721 standard logic or introduces pathing where possible. Pathing could best be described as a lossy encoding scheme in which token amount data and ids occupy shared space under the assumption that negligible token transfers occupying id space do not or do not need to occur.
This standard is entirely experimental and unaudited, while testing has been conducted in an effort to ensure execution is as accurate as possible. The nature of overlapping standards, however, does imply that integrating protocols will not fully understand their mixed function.
Fxstreet breaks it down the best
ERC-404 key features breakdown:
- 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 does ERC-404 work?
One NFT of the underlying project is awarded to the wallet that has a full ERC-404 token. When the token is sold, the NFT is automatically burned. Both the tokens and NFTs can be traded independently.
Is ERC-404 safe?
ERC-404 is not vetted, hence an experimental standard. Its development has not followed the traditional route — Ethereum Improvement Proposal (EIPs). Additionally, it has not undergone a full external audit, but it has been tested extensively.
Since the publication of ERC404 standard, there have been 2 notable projects built
1) Pandora
Coingecko Listing:- https://www.coingecko.com/en/coins/pandora
Etherscan Contract Address:- https://etherscan.io/token/0x9E9FbDE7C7a83c43913BddC8779158F1368F0413
2) DeFrogs
Coingecko Listing:- https://www.coingecko.com/en/coins/defrogs
Etherscan Contract Address:- https://etherscan.io/token/0xd555498a524612c67f286df0e0a9a64a73a7cdc7
There have been a plethora of articles published on ERC404 which you can explore to get more understanding of how the ERC404 standard functions.
