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February 13, 2024

Anonymous Crypto Developers Introduce DN-404 as Competitive Alternative to Pandora’s ERC-404 Token Standard

Anonymous Crypto Developers Introduce DN-404 as Competitive Alternative to Pandora's ERC-404 Token Standard

A group of developers introduced an alternative implementation of the experimental ERC-404 token standard–”Divisible NFT” or DN-404. According to the developers, DN-404 aims to achieve results similar to ERC-404 but with enhanced efficiency, as it is expected to yield a 20% reduction in the impact on transaction fees.

The underlying concept of ERC-404 was to establish a single contract capable of functioning as both a fungible and non-fungible token. However, achieving this without introducing exploits and violating standards proved unfeasible. As outlined by one of the DN-404 developers, the alternative approach involves employing two distinct contracts – a “base” ERC-20 and a “mirror” ERC-721.

Moreover, the mirror contract can be treated similarly to any standard ERC721 token, showcasing full compliance with all functions compatible with protocols supporting ERC721s. As base ERC20 tokens undergo transfers, the mirrored NFTs will be minted and automatically burned, offering a seamless integration process.

Potential issues could be mitigated by separating the two elements into distinct, conventional contracts. “The outcome is a return to the intended state. The ERC-721 and ERC-20 contracts exist independently, functioning as standalone entities. However, beneath the surface, they operate on shared 404 rails,” explained another pseudonymous developer contributing to the project.

The developers further highlighted that the code lacks an audit, indicating inherent risk. Notably, unlike the ERC-404 initiative, they have refrained from introducing their token-NFT hybrid using the code presented.

Moreover, developers clarified that, despite the enjoyable process of building the code, they do not consider 404 to be something serious. However, given the cryptocurrency sector’s expressed interest in its continued use, they deemed it worthwhile to create an implementation that prioritizes efficiency and safety.

Pandora’s ERC-404 Token Standard Experiences Rapid Surge

The ERC-404 token standard was introduced by the Pandora team approximately two weeks ago with the objective of combining ERC-20 tokens and NFTs. The overarching concept aimed to facilitate the inherent fractionalization of NFTs, allowing them to be separated and recombined at the user’s discretion. However, this approach introduced side effects, such as the possibility of the recombined NFT differing from its original state. Additionally, the tokens presented by the project significantly impacted Ethereum transaction fees, leading to a widespread increase. This prompted other developers to seek ways to formulate its more efficient implementation.

Following the launch, the Pandora team transitioned into a complete entity, awaiting auditing, and plans to implement liquidity locks. Recently, the project announced it is developing ERC-404 V2.1 token standard, which will allow for decreased gas costs for transfers up to 50%.

The introduction of DN-404 signifies a strategic move towards enhanced efficiency and reduced transaction fee impact, addressing industry demands and showcasing a pragmatic response to the evolving needs of the cryptocurrency sector.

Disclaimer

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About The Author

Alisa is a reporter for the Metaverse Post. She focuses on investments, AI, metaverse, and everything related to Web3. Alisa has a degree in Business of Art and expertise in Art & Tech. She has developed her passion for journalism through writing for VCs, notable crypto projects, and scientific writing. You can contact her at [email protected]

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Alisa Davidson
Alisa Davidson

Alisa is a reporter for the Metaverse Post. She focuses on investments, AI, metaverse, and everything related to Web3. Alisa has a degree in Business of Art and expertise in Art & Tech. She has developed her passion for journalism through writing for VCs, notable crypto projects, and scientific writing. You can contact her at [email protected]

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