Author: William M. Peaster, Bankless; Compiled by: Deng Tong, Golden Finance
In the Ethereum ecosystem, we have fungible ERC-20 tokens for digital cash use cases and for Non-fungible ERC-721 token for digital collectibles use cases.
But what if you could perfectly combine the two here?
This convergence is exactly what ERC-404, a new experimental token standard, was created for. In today’s article, let’s take you up to speed on the basics of the ERC-404 standard and Pandora, the first project built using the specification!
What is ERC-404?
Developed by the Pandora team, ERC-404 is a new unaudited token standard designed to bridge the gap between fungible tokens and NFTs.
How it works: ERC-404 creatively blends elements from the ERC-20 and ERC-721 standards that were not traditionally designed for interaction. Its ERC-721 approach deviates from the norm, relying on token minting and burning for partial transfers.
The standard’s GitHub page reads: “This aspect of the concept design was carefully thought out and aimed at creating a system with native segmentation, fluidity , and encourage certain transaction/participation aspects to foster NFTs with unique feature sets."
Why it matters: We've seen NFT sharding protocols, and you can Lock the NFT in it and effectively issue tokens against it. In contrast, ERC-404 is designed to enable native sharding within NFT projects that implement the standard. This opens up new avenues for experimenting and trading NFTs.
Pandora 101
Basic knowledge:Pandora is the first ERC-based -404 Standard built project offering 10,000 ERC-20 tokens and 10,000 associated "copy" NFTs. If you purchase 1 full PANDORA token on an exchange, 1 Replicant NFT will be minted into your wallet. If you sell 1 PANDORA token, the NFT it is connected to will be burned.
How Rarity Works: Every time a Replicant NFT is minted into your wallet, it appears with a unique rarity. The most common is green, while the rarest is red.
Therefore, the rarity of the replicas you receive can be "re-rolled" by trading PANDORA tokens. Since the title of the series is Pandora, and the replicas currently come in box form, it's safe to assume they'll "open" later to reveal something.
Supported platforms: Because ERC-404 is experimental, many platforms do not automatically support the standard. However, PANDORA is already traded on decentralized exchanges like Uniswap and NFT marketplaces like Blur and OpenSea.
Price surges: In less than a week since launch, PANDORA and Replicants have rapidly surged in value as excited traders jump on board. The price of PANDORA has increased by 440% during this period and is currently around $8,385 (~3.52 ETH), while the lowest price for Replicants is currently around 3.7 ETH on Blur.
![7177394 CGPsM7ZzpjIoCbO1rNIlXPhGJKQMq0MhNQos2xRR.png](https://img.jinse.cn/7177394_watermarknone.png)
Is it a trend or will it last? What's the plan?
Overall: Pandora is an interesting experimental implementation of the ERC-404 standard. Its code is not as efficient as it could be, but it innovates in the segmentation of NFT smart contracts, a groundbreaking move that will pave the way for more future experiments.
It is noteworthy that: In the future, you can expect more collectibles based on ERC-404 to be launched, and you can expect more platforms to integrate this technology. On the latter front, we have seen smaller projects such as Wasabi Protocol and Peapods Finance adopt this technology recently.
Please note: ERC-404 is currently unaudited, which means it may contain vulnerabilities that have not yet been discovered. In other words, don’t invest more money in an ERC-404 project than you can afford to lose in the early experimental stages. Additionally, when you sell PANDORA tokens, the last Replicant you receive will be burned – making sure you don’t mistakenly burn the ones you want to keep!