A novel Ethereum token standard, ERC-404, has swiftly garnered attention within the blockchain community, eliciting both admiration and critique from seasoned industry figures.
Termed ERC-404, this standard amalgamates the functionalities of ERC-20 tokens with those of ERC-721, commonly utilised in crafting non-fungible tokens (NFTs).
Notably, ERC-404 facilitates the fractional ownership of NFTs, exemplified by the subdivision of assets like the Bored Ape Yacht Club among numerous wallet holders.
Introduced earlier this year by anonymous developers under the alias “ctrl” and “Acme” within the Pandora project, ERC-404 has already seen notable success, with the inaugural ERC-404 token witnessing a remarkable surge, returning 530% since its issuance on Feb. 6.
Presently, Pandora ERC-404 tokens command a trading price of $23,484 and boast a market cap of $235 million.
Plans for the protocol’s future entail a reduction in protocol gas fees by 28% to 50%.
Nonetheless, not all share an optimistic outlook on ERC-404’s potential.
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“The negative feedback centres on [ERC-404] deviating from standard ERC procedures, technically rendering it a non-ERC token,” remarked Miguel Prada, co-founder and tech lead at Diva Staking.
He further cautioned, “The absence of standardisation poses a significant constraint, potentially limiting independent integration and adoption by DeFi projects or exchanges.”
Echoing similar sentiments, Ryan Lee, chief analyst of Bitget Research, emphasised the experimental nature of ERC-404, cautioning against premature optimism.
“While ERC-404 presents an innovative prospect, its longevity and widespread acceptance remain uncertain,” Lee remarked.
Conversely, Akash Mahendra, head of developer relations at layer-1 blockchain Haven1, hailed ERC-404 as a “game changer.”
Mahendra lauded its capacity to transform Ethereum into a frontrunner in real-world asset tokenisation, opening avenues for novel utility.
However, despite growing momentum, ERC-404 awaits official endorsement from the Ethereum Foundation, with its status pending review as an Ethereum Improvement Protocol.
Mahendra, acknowledging the associated risks, urged cautious consideration from investors, citing potential vulnerabilities in unaudited projects.
As the blockchain community awaits the verdict on ERC-404’s fate, Mahendra advises vigilance amidst the excitement surrounding this pioneering innovation.
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