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Controversy Surrounding ERC-404 Tokens Splits Blockchain Community

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Controversy Surrounding ERC-404 Tokens Splits Blockchain Community

A new token standard called ERC-404, which combines the technology of ERC-20 and ERC-721, is receiving mixed reviews from industry experts in the blockchain sector. ERC-404 allows for the fractional ownership of nonfungible tokens (NFTs), such as the Bored Ape Yacht Club. Created by pseudonymous developers under the project Pandora, the first ERC-404 token was issued earlier this year and has seen impressive returns, with a current market cap of $235 million. The developers plan to reduce gas fees by 28% to 50% in the future. There are concerns about ERC-404 not following standard procedures and its lack of acceptance as an ERC token by the Ethereum Foundation. Critics argue that it may struggle to gain widespread adoption and face limitations when dealing with NFTs representing real-world assets. Despite this, some experts believe ERC-404 has the potential to revolutionize asset tokenization and create new opportunities in the Ethereum ecosystem. Users can purchase ERC-404 tokens that adhere to both ERC-20 and ERC-721 standards, providing exposure to price movements without minting rights. It is important to note that ERC-404 is still pending review as an Ethereum Improvement Protocol and carries risks due to its lack of official audit and approval. Investors are advised to approach ERC-404 projects with caution until the standard is thoroughly vetted.

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