ERC-404 explained: an experimental token standard

Transcript

everybody is talking about ERC 404 whenever you see somebody talking about a new token standard which is what ERC those are token standards everybody gets hyped everybody excited it's you know new innovation what does it mean okay well let me break down ERC 44 in the simplest way I possibly can first off this was developed by the Pandora team this is a team that launched an nft collection and this is an unofficial token standard I want to be clear about that it's unofficial whereas ERC 721 erc20 are official token standards because they've been vetted they've been used for a while so this is very experimental basically what this new token standard aims to do is Bridge The Divide between fungible tokens and nfts

and the main divide is liquidity and fractionalization right you have this problem that exists right now within the nft ecosystem of it's difficult to sell an nft because there isn't enough liquidity because a lot of nfts cost $3,000 and there's not a lot of people looking to throw around $3,000 you can't buy a fraction of an nft I shouldn't say that you can't do it you can with some of the nft defi products nf5 blend all these different products that allow you to fractionalize an nft but you can't do it natively within the token standard and that's exactly what ERC 404 aims to

do is it enables you to treat the token as either a fungible token or as an NF based token and it also enables really unique burn and mint mechanics so look super experimental super early we'll see where this leads there's a lot of hype around this like definite hype cycle right now like Pandora nfts have gone to I think they're at like two eth or something like that maybe even three e feel like it's even more now yeah yeah total hype cycle like this is experimental if you're a project that wants to build on ERC 404 by all means go for it but it's an unofficial token standard make sure you get somebody audit your smart contracts there's a lot

of a lot that needs to happen here before this gets to mainstream if it even does get to mainstream I want to just talk about a couple of ways that this could be used the Pandora rocket is at 11.5 e this morning just figure where are you wild it wild imagine wild so $256 million Barky cap for this thing just doesn't been around for like since what February 2 feary see so a couple different use cases for this like basically what this allows you to do is when you when somebody purchases a full token a full fungible token so let's say you

purchased one eth if eth used this token standard then an nft automatically gets minted to your wallet so in the opposite way what you could do is you could purchase a p like a fraction of a token you P 0.1 of a token and as a result you wouldn't get the nft burn to your wallet but you would have ownership of that nft you would have a fractional ownership of it because you have 0.1 of that token so it allows these interesting mechanics I think this is particularly relevant in gaming this is where I think we'll see this the most because what happens a lot in gaming is you play a game and you earn points in the game and then you use

those points to purchase things in the game to craft new items in the game like let's say you play a game and you get 10 points and then as a result of 10 points you can craft a sword well imagine doing that on chain with ERC 404 you could now do that in a native way where you earn the token in the game ER and ERC 404 and once you have a full token then you can craft an item which automatically mints an nft to your wallet so you can see how this connection between the two can lead to a lot of just easier ways that developers can make this connection

between a fungible token and an nft love the The Innovation I mean we we need Innovations around tokens right tokens is really everything that we do here on a chain and so if we can make them more expressive then we can innovate better and and also limit risks right like a lot of the things that we talked about especially in regards like fractionalization you can do but you add risk when it's a bunch of different smart contracts you got to use some other companies whereas if it can be it all in the same um token standard that it makes it easier cheaper less risk so like these are all just innovations that will improve upon each other so really cool to see that kind paying buying a pandor though for 11 Point whatever no definitely not hype cycle all the way