Ethereum revolutionizes NFTs with ERC-404!

A completely new Ethereum standard named ERC-404 is currently under development. Spearheaded by creators “ctrl” and “Acme,” this ambitious project aims to merge the fungible ERC-20 tokens with the usually incompatible ERC-721 NFTs. Behind this revolutionary idea lies the potential for fractional ownership of NFTs, a concept with profound implications.

The ERC-404 Hybrid Token Concept

The purpose of the ERC-404 standard is to combine the ERC-20 standards, which define fungible tokens such as USDT, with ERC-721, used for unique NFTs. This ambitious merge would result in a hybrid token that brings together the best of both worlds.

Specifically, ERC-404 tokens would allow multiple wallets to own fractions of the same iconic NFT. This way, it would be possible to own shares in a Bored Ape Yacht Club or a rare digital artwork. These fractional shares would then be tradable or usable, just like any ERC-20 token.

This disintermediated innovation in the field of NFT ownership opens up new use cases. For instance, lenders could accept fractions of an NFT as collateral, instead of having to seize the entire NFT. However, the technical challenges are complex for a successful integration of the two standards.

Ethereum, Adoption, and Criticisms Raised by ERC-404

Although its development is still experimental, the ERC-404 standard has already garnered a lot of interest within the crypto ecosystem. Industry giants like Binance and OKX quickly announced their support for the standard before retracting it.

The Pandora token, the first to adopt ERC-404, experienced explosive growth in its valuation. Other projects using ERC-404 have also emerged, demonstrating the potential of this concept.

However, ERC-404 also draws criticisms from within the crypto community. Some developers such as “quit” have warned against security flaws, like the potential theft of fractionated NFTs on poorly-configured lending platforms.

The creators of the standard have downplayed these risks, attributing the issues more to an incorrect implementation of ERC-404. Regardless, utmost caution remains paramount when it comes to the security of this experimental technology. Its adoption will require thorough audits and checks before it is deemed safe. With their ERC-404 standard, Ethereum developers are pushing the boundaries of blockchain innovation by merging two previously incompatible standards.

Despite the technical challenges and controversies, this promising concept of fractional NFTs is already generating a tremendous amount of excitement. If properly audited and secured, Ethereum’s ERC-404 could become a major revolution for the future of cryptocurrencies and digital ownership. The next steps of this experimental project are crucial.