ERC-721 and ERC-20 are combined in ERC-404 for fractional NFTs. Disagreement with Ethereum standards generates skepticism.
Regarding the introduction of the ERC-404 token standard, the blockchain community is divided, with sentiments ranging from enthusiasm to skepticism. The innovative standard, which integrates elements of the ERC-20 and ERC-721 protocols, has generated both applause and reproach from industry professionals.
ERC-404 is a hybrid token that combines the features of ERC-20 and ERC-721 tokens, created by anonymous developers for the Pandora project. The fractionalization of NFT ownership, which permits multiple wallet holders to jointly own a single NFT, constitutes its unique selling proposition.
This innovation in the field of fractionalized NFTs, which involves the distribution of assets like the Bored Ape Yacht Club among investors, has particularly captivated enthusiasts.
Expanded at $23,484 with a market capitalization of $235 million, the initial Pandora ERC-404 token has experienced an astounding 530 percent return since its issuance. Developers have made a deliberate effort to decrease protocol gas fees by a substantial margin of 28% to 50% in the near future.
While certain individuals laud ERC-404 as a paradigm shifter, others voice concerns regarding its implementation and technical conformity with Ethereum standards. Miguel Prada, one of the co-founders of Diva Staking, expresses worries regarding ERC-404’s deviation from established ERC protocols, which may impede the protocol’s ecosystem integration and approval.
As a significant limitation, Prada emphasizes the uncertainty surrounding ERC-404’s applicability to Ethereum, citing its deviation from standardization.
Ryan Lee, the principal analyst at Bitget Research, emphasizes the experimental nature of ERC-404 and its lack of official incorporation in the Ethereum Foundation’s ERC standard. Lee draws attention to established protocols that are part of the ERC standard, including ERC3475 and ERC3525, which have already investigated the combination of fungible and non-fungible tokens.
On the contrary, Haven1’s director of developer relations, Akash Mahendra, praises ERC-404 as a prospective catalyst for the tokenization of tangible assets on Ethereum. Mahendra considers ERC-404 a revolutionary development because it provides users with access to the functionalities of both ERC-20 and ERC-721 in a single token.
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