In the crypto sector, new standards are emerging following the introduction of the BRC-20 standard on the Bitcoin chain. This time, it's Ethereum's blockchain witnessing the arrival of ERC-404 tokens, an innovation spearheaded by 0xacme, a former engineer at Coinbase.
So, what exactly is the ERC-404 standard on Ethereum? It's an experimental proposal aiming to combine the features of ERC-20 tokens and ERC-721 NFTs. The goal is to create tokens that are both highly liquid and rare simultaneously. Designed by a former Coinbase engineer, this standard leverages the advantages of both token types, overcoming their respective limitations.
ERC stands for Ethereum Request for Comments, a technical specification used for tokens on the Ethereum blockchain. These specifications define the rules tokens must follow to interact with the blockchain and other applications, such as exchanges or wallets.
ERC-20 tokens are fungible digital tokens, completely interchangeable, making them suitable for use as digital currencies or platform tokens. On the other hand, ERC-721 tokens are non-fungible, with each token possessing unique characteristics determining its rarity and value, often used as NFTs.
The new ERC-404 standard aims to introduce a token that can be partially interchangeable while preserving its uniqueness.
What are ERC-404 tokens used for? They serve as an innovation in blockchain, facilitating fractional ownership of expensive assets, enhancing liquidity, and enabling greater participation in markets otherwise accessible to only a few.
For example, in the art sector, ERC-404 tokens make prestigious works more accessible. In real estate, they simplify investments and shared ownership. Games and metaverses also benefit from this new standard, allowing assets to be divided and shared among players, enriching online interaction. In decentralized finance, ERC-404 tokens enable investment in startups or innovative projects at a lower cost, opening doors to more democratic and community-based investments.
Meme coins flood the new ERC-404 standard, according to CoinGecko data, the ERC-404 token sector is projected to reach a market cap of nearly $52 million by 2024.
Among the most popular projects, Pandora stands out at the top of the list with a market cap of $40.5 million. This innovative project allows for the fractionalization and trading of NFTs, with each token issued linked to an NFT, facilitating the buying and selling of NFTs.
In fourth place by market cap is DeFrogs, capitalizing on the frenzy for frog-themed meme coins. This meme coin reached an all-time high of $3,900 and later slid to $214.
Rugged Art is another meme coin, but centered around penguin themes. The project started as an NFT collection on the Solana chain before adopting the ERC-404 standard. After reaching a peak of $1,516, it experienced a decline and is now trading at $20.88.