ERC 404 Token
What are ERC-404 Coins und wo kann man sie kaufen?
- ERC 404 Token are a new, experimental token standard on Ethereum.
- It combines the properties of fungible tokens (ERC-20) and NFTs (ERC-721).
- When an ERC404 token is purchased, an NFT is simultaneously minted and burned when it is sold
- ERC 404 tokens increase the liquidity of NFTs and can be traded like normal tokens
- Currently ERC404 Token are only available on Uniswap and other decentralized exchanges
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ERC-404 Tokens: A New Standard for NFTs
What is ERC-404?
ERC-404 is an experimental token standard on the Ethereum blockchain. It innovatively combines the features of fungible tokens (ERC-20) and NFTs (ERC-721), opening up new possibilities for interacting with digital assets.
How does ERC-404 work?
ERC-404 blends elements from the established ERC-20 and ERC-721 standards. ERC-20 tokens are fungible, meaning they are replaceable and traded in any fraction. NFTs, on the other hand, are non-fungible, with each token being unique and irreplaceable.
ERC-404 allows merging these qualities. NFTs can be split into fractional parts and traded like fungible tokens. This enhances NFT liquidity and enables investors to participate in an NFT without buying the entire asset.
First Projects with ERC-404
The first project utilizing the ERC-404 standard is Pandora. Pandora offers 10,000 ERC-20 tokens called PANDORA and 10,000 associated “Replicant” NFTs. When a user purchases a PANDORA token, a Replicant NFT is minted in their wallet. Conversely, selling the token burns the associated NFT.
Benefits of ERC-404
- Increased Liquidity for NFTs: Dividing NFTs into fractional parts simplifies trading and boosts liquidity.
- New Avenues for Experiments and Trading: The ERC-404 standard fosters novel NFT applications, such as “farming” rare NFTs.
- Enhanced Interoperability: ERC-404 tokens seamlessly interact with other ERC-20 and ERC-721 tokens.
Risks of ERC-404
- New Standard: ERC-404 is still in its early stages and hasn’t undergone a full audit yet.
- Complexity: Combining two standards can introduce some complexity.
- Potential Security Issues: As with any new standard, security vulnerabilities are possible.
Conclusion
ERC-404 is a new and innovative token standard that has the potential to reshape the NFT landscape. It offers fresh possibilities for experimentation and trading, and it can raise NFT liquidity.