The metaverse is Unbanked Newsletter For a weekly level up on the NFT and on-chain frontier
Dear unbanked nations,
The Ethereum ecosystem has fungible ERC-20 tokens for digital cash use cases and non-fungible ERC-721 tokens for digital collectible use cases.
But what if you could mix the best of both worlds here?
This mix is why a new experimental token standard, ERC-404, was created.
In today’s post, we’ll teach you the basics of the ERC-404 standard and the first project built using this specification: Pandora!
-WMP
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more 101: Developed by pandora team, ERC-404 A new unaudited token standard that aims to bridge the gap between fungible tokens and NFTs.
How it Works: ERC-404 creatively blends elements of the ERC-20 and ERC-721 standards that were not traditionally designed to interact. The ERC-721 approach deviates from the standard by relying on token minting and burning for partial transfers.
“This aspect of the conceptual design is intentional, with the goal of creating an NFT that has built-in sharding, liquidity, and encourages some aspect of trading/engagement, creating a unique set of characteristics,” reads the standard’s GitHub.
Why is it important?: We have seen NFT splitting protocols that allow us to lock up NFTs and effectively issue shares for them. In contrast, ERC-404 is designed to achieve sharding natively within NFT projects implementing the standard. This opens up new ways to experiment and trade NFTs.
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The Basics: Pandora, the first project built on the ERC-404 standard, offers 10,000 ERC-20 tokens and 10,000 associated “Replicant” NFTs. If you buy one full pandora The exchange’s token, 1 Replicant NFT, is created in your wallet. When you sell 1 PANDORA token, the associated NFT will be burned.
How Rarity Works: Each time a replicant NFT is created in your wallet, it will appear with a unique rarity. The most common replicants are green and the rarest replicants are red.
It is therefore possible to “rebalance” the rarity of the replicants you receive by trading PANDORA tokens. The collection is called Pandora and the replicants are currently marked as boxes, so it’s safe to say that they will be “opened” to reveal something later.
Supported Platform: Because ERC-404 is experimental, many platforms may not automatically support the standard. However, PANDORA is already traded on decentralized exchanges such as Uniswap and NFT marketplaces such as: blur and open sea.
to the moon: Less than a week after launch, PANDORA and Replicants saw their values boom as excited traders flocked to them. PANDORA is up +440% over the period, reaching its current price of ~$8,385 (~3.52 ETH). Replicant is currently worth ~3.7 ETH on Blur.
conclusion: Pandora is an interesting experimental implementation of the ERC-404 standard. code Gas efficiency is not good However, it revolutionizes fractionalization at the smart contract level for NFTs, and this pioneering effort will pave the way for more experiments to come.
What to see: In the future, look for more collections to be released based on ERC-404, and look for more platforms to integrate the technology. For the latter, we’ve already seen recent adoption in smaller projects such as: Wasabi Protocol and Peapod Finance.
be careful: ERC-404 has not been currently audited, so there may potentially be vulnerabilities that have not yet been discovered. In other words, don’t invest more money into your ERC-404 project than you can afford during the early experimental stages. Additionally, when selling PANDORA tokens, the last replicant received will be burned. Be careful not to accidentally incinerate replicants you want to keep!
William M. Feaster is the creator of metaverse—A bankless newsletter focused on the emergence of NFTs in the cryptoeconomy. He also serves as a senior writer for the Bankless newsletter.
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It is not financial or tax advice. This newsletter is strictly educational and does not constitute investment advice, a solicitation to buy or sell any asset, or a solicitation to make any financial decisions. This newsletter does not constitute tax advice. Consult your accountant. Do your own research.
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