This week, a new token standard called ERC-404 has gained significant attention in the crypto market
The token, known as Pandora (PANDORA), has experienced a remarkable price surge of 12,500% since its launch earlier this month. What sets Pandora apart is its combination of the fungibility of ERC-20 tokens with the unique characteristics of rare non-fungible tokens (NFTs).
Pandora Tokens: Blending Fungibility and Rarity
Pandora tokens are fractional representations of whole NFTs. These tokens are tradeable and liquid on decentralized exchanges (DEX) like regular ERC-20 tokens. By fractionalizing NFTs, Pandora enables them to be as liquid as any other trading pair on DEX platforms.
Creating Liquidity through Fractionalization
Pandora’s ERC-404 tokens are linked to colored box NFTs with varying rarity levels. When someone purchases an ERC-404 Pandora token, a random box NFT is minted and bound to that token. On the other hand, when someone sells the token, the related NFT is burned. The NFTs themselves can be traded on NFT marketplaces.
Adoption and Criticism of ERC-404 Standard
Binance and Inscribe have both announced their support for the ERC-404 standard in their respective platforms. However, some developers have expressed concerns about the potential risks associated with lending pools that may not be ready for this new token standard.
Despite the criticism, the introduction of ERC-404 represents a novel approach to fractionalization in the world of NFTs.
Conclusion
The emergence of Pandora and the ERC-404 standard marks a new era of tokenization, combining the best of fungibility and rarity. While the standard is still experimental and has not gone through the formal Ethereum Improvement Proposal process, it has already gained significant traction in the crypto market. As the ecosystem continues to evolve, it will be interesting to see how ERC-404 and similar token standards shape the future of NFTs.
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