Understanding ERC-404

In the ever-evolving world of blockchain and cryptocurrency, innovation continues to drive the development of new token standards. One such standard that has captured the attention of the Ethereum community is ERC-404. This experimental token standard is poised to bring about a transformative change in the NFT market. In this article, we will explore ERC-404 in detail, shedding light on its functionality, advantages, and potential use cases.

What is ERC-404?

ERC-404, short for Ethereum Request for Comment-404, is an experimental token standard built on the Ethereum blockchain. It aims to combine the features of ERC-20 tokens (fungible tokens) and ERC-721 tokens (non-fungible tokens or NFTs) into a single unified standard.

Notably, ERC-404 introduces the ability to transition between fungible and non-fungible attributes, depending on the specific implementation. For instance, a token can start as a fungible token and later be converted into an NFT, possessing unique characteristics and value. Conversely, a token can begin as a non-fungible token and subsequently be divided into smaller fungible portions that can later be recombined into an NFT.

The brainchild of the Pandora project, a metaverse platform allowing users to create, explore, and trade digital assets, ERC-404 represents an exciting leap forward in the world of NFTs. The first token to utilize this standard is $pandora, representing the Pandora Box, an NFT containing a unique digital creature known as a Copy, which can evolve and interact with other Copies.

It is important to note that ERC-404 is not an official Ethereum standard but rather an open experimental standard aimed at gathering feedback and facilitating improvements.

How Does ERC-404 Work?

ERC-404 achieves its functionality by associating each issued token with an NFT, serving as a source of authentication for the token’s state and ownership rights. Each NFT can have a defined base unit that determines the minimum number of tokens that can be transferred or exchanged.

For example, if the base unit is set to 100, each token can be divided into 100 parts, with each part representing 1% of the NFT. Additionally, each token can have a maximum supply, specifying the maximum number of tokens that can be issued for each NFT. For instance, if the total supply is set to 1000, each token can be issued up to 1000 times, with each issuance representing 0.1% of the NFT.

ERC-404 introduces four main functions for token contracts:

1. Mint: Enables token creators to issue new tokens for a specific NFT, within the overall supply limit. This function also verifies the existence of the NFT and the token creator’s ownership rights.
2. Burn: Allows token owners to destroy tokens, reducing the total supply. This function also verifies the owner’s token balance and the existence of the NFT.
3. Transfer: Enables token owners to send tokens to another address. This function verifies the token owner’s balance and the existence of the NFT. It also updates the ownership rights of the NFT based on the token balance. For example, if the token owner transfers all their tokens to another address, the ownership rights of the NFT are transferred as well.
4. BatchTransfer: Allows token owners to send multiple tokens to multiple addresses in a single transaction. This function verifies the token owner’s balance and the existence of the NFT. Similar to the Transfer function, it also updates the ownership rights of the NFT based on the token balance.

Advantages of ERC-404:

ERC-404 offers several advantages over existing token standards, including:

1. Enhanced versatility: By combining fungible and non-fungible attributes, ERC-404 broadens the scope of token capabilities, allowing for new and exciting use cases.
2. Seamless transition: The ability to convert between fungible and non-fungible tokens provides flexibility for creators and users, adapting to their evolving needs and preferences.
3. Interoperability: ERC-404 tokens can seamlessly interact with existing ERC-20 and ERC-721 tokens, enabling a more cohesive and interconnected ecosystem.
4. Experimentation and feedback: As an open experimental standard, ERC-404 encourages community participation, feedback, and iterative improvements, fostering innovation within the Ethereum ecosystem.

Conclusion:

ERC-404 represents a significant step forward in token standards, bringing together the worlds of fungibility and non-fungibility on the Ethereum blockchain. With its unique capabilities and potential use cases, ERC-404 promises to revolutionize the NFT market and unlock new possibilities for creators and users alike. As the Ethereum community continues to explore and refine this experimental standard, we eagerly await the exciting developments that lie ahead.

References:

• ERC-404 là gì? Chi tiết tiêu chuẩn token mới đang thử nghiệm mới trên Ethereum. Retrieved from: [insert the URL of the original articleTitle: Exploring ERC-404: The New Token Standard Revolutionizing Ethereum