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Recently, people in the crypto world have been talking a lot about ERC-404, and there's a bit of excitement and guessing going on. Those who've been following closely might have caught on that it's a new and unofficial token standard. It attempts to mix the features of ERC-20 tokens with the qualities of ERC-721 tokens to create a new unique token standard.
Every day witness the emergence of new token standards on the Ethereum blockchain. However, the introduction of ERC-404 marks a notable milestone in the progression of token standards within the Ethereum blockchain.
It’s a bit cryptic topic to be discussed deeply. Let’s take a look at what ERC-404 tokens exactly are, how they work, and their benefits in detail.
ERC-404 token is an experimental token standard on the Ethereum blockchain that blends the features of fungible and non-fungible tokens. This is the first one to introduce the new concept of semi-fungible tokens. ERC-404 was created by developers who are pseudonymously called ‘ctrl’ and ‘Acme’. They have combined the ability of ERC-721 to create unique tokens and the liquidity of ERC-20 to create a unique semi-fungible token with enhanced liquidity and fractional ownership.
Although the ERC-404 token is not officially out as an Ethereum Improvement Proposal (EIP), its possibilities are endless. It can make the inaccessible digital asset with high value more attainable and liquid. Using ERC-404 tokens, you can even own a fraction of rare digital artwork or virtual real estate property.
The entry of ERC-404 has created a new category of digital assets known as semi-fungible tokens, effectively closing the divide between fungible and non-fungible tokens. These tokens have dual functionality, operating as fungible tokens under specific conditions and switching to non-fungible tokens under alternative conditions.
ERC-404 tokens have introduced the concept of fractional ownership into NFTs. The importance of ERC-404 is that it brings a way to break NFTs into smaller parts and makes it easier to buy and sell them. This not only creates new ways to handle and trade assets but also encourages new ideas and involvement in the digital asset world. By combining the benefits of ERC-20 and ERC-721 tokens, ERC-404 is making the digital asset world more open and dynamic.
ERC-404 token works on a mint-and-burn mechanism that enables fractional ownership and the transfer of non-fungible tokens. This mint-and-burn mechanism enables the division of NFTs into smaller and manageable pieces. It provides everyone equal access to valuable digital assets and improves liquidity in the market.
Each ERC-404 token is connected to a Non-fungible Token. So when you buy a token, a corresponding token is created in your digital wallet. Similarly, if you mint an NFT, you will also get a token that goes with it.
Likewise, selling a fraction of a token will burn the NFT connected with it. Also, if you collect enough fractions to make a complete token, a brand-new NFT is minted. This is to ensure that every complete token always has an NFT with it.
What makes these tokens extra special is that you can trade both the tokens and NFTs separately.
Let's take a closer look at the key features that make ERC-404 tokens unique and innovative. In simple terms, these features bring a fresh approach to the world of digital assets.
ERC-404 tokens introduce fractional ownership, allowing investors to own a portion of high-value assets. You don't need to buy a whole asset; instead, you can own a fraction, making investing more accessible to a broader audience.
With native fractionalization, the process of breaking down assets into smaller, tradable parts is seamlessly integrated into the ERC-404 token standard. This simplifies the ownership and trading of fractions of valuable assets.
Liquidity enhancement is a crucial feature that ensures assets can be easily bought or sold without affecting their market value. ERC-404 tokens promote liquidity, making it simpler for investors to enter or exit positions in the market.
ERC-404 tokens enable dynamic trading, that you can actively trade your tokens on different platforms. This flexibility gives investors more control over their assets, allowing them to react to market changes and opportunities in real-time.
Incorporating the concept of inherited properties from ERC-21 and ERC-720, ERC-404 brings a unique and powerful feature to the world of blockchain. Like ERC-20 tokens, each ERC-404 token representing a specific fraction is identical and interchangeable with others of the same fraction.
ERC-404 tokens can facilitate dividend distribution, allowing token holders to receive a share of profits generated by the underlying assets. This feature provides a way for investors to earn passive income from their token holdings.
These digital assets bring a whole new level of benefits. Here are some of the key benefits of ERC-404 tokens.
ERC-404 tokens eliminate the need for middlemen or intermediaries. Transactions occur directly between users on the blockchain, cutting down on unnecessary steps and potentially reducing associated costs.
With ERC-404 tokens, you don't need to buy a whole asset; you can own a fraction. This concept of fractional ownership makes investing more accessible, enabling individuals to participate in high-value assets without a significant upfront investment.
ERC-404 tokens introduce fresh investment opportunities. The ability to own parts of valuable assets and explore diverse projects within the ERC-404 ecosystem provides investors with a range of choices to diversify their portfolios.
The user-friendly features and innovative functionalities can attract a more extensive user base, driving increased adoption of blockchain technology.
ERC-404 tokens enhance accessibility by making digital assets more user-friendly. The straightforward processes and reduced complexity enable both seasoned crypto enthusiasts and newcomers to comfortably engage with these tokens.
The ability to easily buy or sell tokens without significantly impacting their market value enhances liquidity, providing investors with flexibility in entering or exiting positions.
Several projects have started exploring the opportunities offered by ERC-404. Here we have listed a few tokens that have taken the initiative to transform the NFT market through fractional ownership and enhanced liquidity. Their early adoption indicates the growing interest in this semi-fungible token standard.
Pandora has become widely popular since its recent launch of the ERC-404 standard. It has a collection of 10,000 NFTs that are connected to 10,000 Pandora tokens created on Ethereum’s ERC-20 standard.
In simple terms, Pandora is a popular ERC-404 token that's the biggest one currently available, and its value has gone beyond $100 million. In the first few days of trading, people traded it a lot, with a volume of over $76 million, making it one of the most talked-about launches recently.
Some more projects come up to compete with Pandora. One of them is DeFrogs. This token contains 10,000 frog PFPs built using the ERC-404 standard. By following the ERC-404 standard, the project makes sure that it can offer steady liquidity for investors whenever they want to sell their holdings.
Taking advantage of the hype around Pandora’s success, the project has skyrocketed by over 2000% in the past three days. As of now, each token is being traded at $2,800, and the total value of all the tokens in circulation is $27.6 million.
Inspired by Pandora, the Rug project wants to introduce pixel penguins to the ERC-404 system. By bringing the project to Ethereum, $RUG aims to be a leading ERC-404 coin.
They have a total of 10,000 RUG tokens. Most, 75%, will be used for liquidity on decentralized exchanges (DEX) such as Uniswap and Jupiter. To attract Solana Flippers fans, they're giving 20% of the supply to current holders, and the last 5% will be given away.
Its innovative concept, Ethereum integration, limited token supply, liquidity focus, community rewards, and inclusive giveaway make Rug a compelling and promising investment.
Froggy Friends is all about building a friendly community in the world of cryptocurrency. Adding a playful twist, Froggy Friends features cute frog characters. This not only makes the ERC-404 ecosystem more enjoyable but also fits into the bigger goal of making blockchain technology easy to understand and fun for users
The well-known Froggy Friends brand has gained more than 20 million views for its cute frog GIFs on Giphy. Now, their focus is on promoting products through these popular GIFs. $TADPOLE is the official ERC-404 collection of the project, opening up new chances for licensing. This is the brand's initial attempt in the ERC-404 space, leading the way in capturing the interest of wider audiences.
Monarch stands out as the very first gamified token using the ERC-404 standard. It offers players the chance to compete on the blockchain, creating their NFTs, which are like digital dragons.
There are 8,888 dragons in total, and as the game progresses, they'll be gradually removed from circulation. The game's idea is to compete, level up your dragon, participate in contests, and win prizes. Once all 8,888 dragons have hatched, the legacy stage begins, allowing holders to stake their token rewards.
$MNRCH reached its highest value of $2,513.74 right after its launch but has dropped to a low of $70.95. Currently, it's valued at $919,455.
404 Bakery is the world's first ERC-404 Factory, specially made for Ethereum enthusiasts to easily create their own ERC-404 tokens.
BAKE, the cryptocurrency launched in 2024, has a total supply of 97.50 million, and currently, 94.47 million BAKE tokens are in circulation.
404 Bakery provides a limited supply of tokens, making them exclusive and possibly more valuable over time. This scarcity adds a rare touch, attracting both collectors and enthusiasts to the project.
In the realm of ERC-404 tokens, 404 Bakery is at the top, offering a unique mix of innovation, tokenomics, and community-driven development.
To address the issues of liquidity and rarity management in the NFT marketplace, Anon aims to transform how top-notch NFTs are traded on platforms like OpenSea, which currently uses an auction model.
If buyers hold less than one token, they won't get the corresponding NFT; instead, it will be locked in a deck. This approach is meant to increase the rarity of the token, and there are only 352 of these tokens in circulation currently.
Next up is $CRYSTAL, which has its roots in Scattering.io, a platform providing liquidity for NFTs and DEXs. Currently, it serves as the main utility token on the Ethereum layer-2 blockchain Arbitrum.
Scattering.io is looking to collaborate with creators and game developers on Arbitrum to expand the reach of the ERC-404 standard and explore new potential use cases.
If successful in establishing a marketplace for ERC-404 token trading on Arbitrum, $CRYSTAL will play a crucial role in governing this ecosystem. Presently, there are 4,200 Crystal tokens in circulation.
They reached an all-time high of $687.32 on February 8, 2024, but have since dropped by as much as 50% from that point. The market capitalization stands at $1,421,690, with a current 24-hour trading volume of $41,215.
Step into the world of ERC-404 tokens, and you'll discover Pet The Dog standing out as the top choice in this category.
By encouraging a sense of friendship among its holders, the project aims to build a helpful and welcoming atmosphere within the crypto community.
PET THE DOG (ERC404) is a recent cryptocurrency introduced on February 7, 2024. Currently, its price stands at $14.026, and the 24-hour trading volume is $0.
For those interested in buying PET THE DOG (ERC404), you can use features that automatically identify the most cost-effective and rapid swap option for you. Alternatively, you can purchase it on platforms like Uniswap.
TROVES tokens are available for trading on decentralized exchanges. The go-to place to purchase and trade Troves is Uniswap V3 (Base).
Troves is unique because it provides a variety of different projects in the ERC-404 ecosystem. This diversity ensures that there's something for everyone interested in crypto, catering to different tastes and preferences.
The projects within Troves are created to pioneer new ideas, offering users special and innovative experiences in the realm of ERC-404 tokens.
This innovative advancement in the world of blockchain has blended the benefits of fungible and non-fungible tokens to create a versatile solution. When there are advantages, challenges are likely to accompany them.
Despite its challenges, ERC-404 tokens are widely adopted which points out its ability to bring about a positive change in the realm of digital assets. As this semi-fungible token continues to evolve, we can expect improved liquidity, fractional ownership, and innovative asset management in the days to come.
Maticz is a leading blockchain development company that offers premium token development services to create tokens like ERC-404 with dynamic features. Whether it is a startup or a well-established firm, we help create their own token and boost their revenue. Reach out to us to know more in detail.
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