To address the limitations of ERC-404, developers introduced DN404, a divisible NFT standard that promises improved efficiency and compliance.
How DN404 Works: Exploring Innovative Approaches
DN404 operates based on a ‘base’ ERC-20 paired with a ‘mirror’ ERC-721, providing seamless interaction and compliance within existing protocols.
In line with the recent launch ERC-404, A new experimental hybrid token and NFT standard called DN404 has emerged, aiming to revolutionize the way fractional NFTs are traded and managed. DN404 developers claim that it addresses the inefficiencies and potential vulnerabilities of ERC-404, providing a more robust solution for creating and trading fractional NFTs.
DN404 stands out by adopting a two-contract approach that leverages both ERC-20 and ERC-721 standards to facilitate seamless transactions and ensure compliance with existing protocols.
According to pseudonymous developer “cygaar,” DN404 provides a more user-friendly and secure framework for NFT splitting, allowing users to trade portions of their NFTs on various exchange platforms without the need for intermediaries.
The premise of ERC404 was to create a single contract that could act as both a fungible and non-fungible token.
However, this is not possible without introducing exploits and violating standards.
Instead, our approach uses two contracts: a “mirror” ERC721 and a “base” ERC20.
– Cigar (@0xcygaar) February 12, 2024
However, users emphasize that DN404’s code has not been formally audited, so it is important to exercise caution when using the standard.
Also Read: Guide to Generating ERC-20 Tokens Without Coding
Safety Issues: Risk and Response Assessment
With the advent of DN404, concerns have been raised about the safety of ERC-404, highlighting potential vulnerabilities that could jeopardize NFT assets.
Although ERC-404 developer “ctrl” dismisses these concerns as being due to improper use of contracts, the controversy highlights the importance of thorough auditing and protocol integration to ensure the security of NFT standards.
8/ Now remember how Pandora uses the maximum token ID to decide what kind of transfer to run.
Also remember that depositor 2 has 1*10^18 tokens that can be withdrawn.
Let’s withdraw some of those tokens. Not everything, but just a very small part. Probably around 38,916. pic.twitter.com/iffHJEDyS0
— Quit (🙌,🦄) (@0xQuit) February 8, 2024