Ethereum network gas fees soared to an eight-month peak amidst a surge of interest in a novel, unofficial experimental token standard known as ERC-404.
On February 9, Ethereum network gas prices reached an average zenith of 70 gwei (£47 for a standard transaction), with peak gas expenses skyrocketing to as high as 377 gwei — a level not seen since May 12, 2023.
The surge in gas prices can be attributed to various factors, but it coincided with the escalating buzz surrounding the ERC-404 token standard across the cryptocurrency sphere.
The ERC-404 phenomenon commenced on February 5 when a venture named Pandora introduced the experimental standard.
Subsequently, it has witnessed an increase of over 6,100% and amassed a trading volume exceeding £347 million.
ERC-404 seeks to tether ERC-721 nonfungible tokens (NFTs) to ERC-20 tokens, facilitating what some have termed as fractionalised NFTs.
This permits multiple wallets to possess a portion of a single NFT and utilise that portion for trading or staking for loans.
Despite affixing the prefix “ERC” to this novel token breed, the nomenclature remains decidedly unofficial.
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Speaking to Cointelegraph on February 9, one of the developers behind the Pandora project, known under the pseudonym “ctrl,” conveyed that the team was endeavouring to “significantly reduce” gas costs.
“We’re striving to optimise for gas because that’s a significant aspect of adoption and protocols’ desire to integrate… So, in certain instances, we might potentially reduce gas fees by around 300% to 400%.”
As per the pseudonymous user PopPunk, the co-founder of gas-auditing company Gaslite, an ERC-404 token utilises approximately three times the gas needed for an average NFT transaction.
The heightened network activity on February 9 predominantly stemmed from a surge in transactions on the decentralised exchange protocol Uniswap.
This surge can largely be attributed to the substantial trading volumes generated by Pandora, DeFrogs, and a plethora of other ERC-404 projects, boasting a combined trading volume exceeding £434 million in the past week, according to data from crypto aggregator Birdeye.
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