ERC-404, a new, experimental token standard on Ethereum that combines the properties of NFTs and cryptocurrencies, soared to a market capitalization of $170 million and generated $87 million in trading volume.
Tokens on Ethereum currently fall into two broad categories: non-fungible ERC-721 tokens and fungible ERC-20 tokens.
New Token Standard
ERC-404, a new token standard that combines the features of NFTs and fungible tokens, has created significant hype and momentum in the Ethereum ecosystem. Pandora, the first ERC-404 token to use this standard, has seen a significant rise in value and is currently trading at $16,600, up 5000% since its launch on February 2nd. Pandora’s market capitalization has reached $166 million, according to data from DEXscreener. The floor price of Pandora tokens on the Blur marketplace is currently 7.45 ETH and there are over 1300 token holders.
The new token standard offers a unique approach for projects that combines the tradable nature of ERC-20 tokens with the non-fungible nature of ERC-721 tokens.
Basic liquidity and split within standards
Pandora’s GitHub states that the experimental standard provides basic liquidity and splitting within the standard. The implementation of ERC-404 tokens through the Replicants NFT collection has attracted significant interest from traders, recording a trading volume of approximately $87 million on decentralized exchanges and $1 million on NFT markets. This ranks among the top 15 NFT collections on the market.
The new standards have not yet been fully audited.
ERC-404 has generated considerable hype, but has not yet been fully externally audited. Token standards represent a set of rules that smart contracts must adhere to. For example, the ERC-20 token standard is a set of rules that tokens must adhere to, while the ERC-721 token standard is a set of rules that non-fungible tokens must adhere to. Combining the two standards ensures that each replicant possesses the qualities of both an NFT and a token.
This is different from a split NFT, where a single NFT is split into tradable pieces. The new token standard significantly improves the liquidity and availability of funds for NFTs, which are notoriously illiquid assets. Users also don’t have to list their NFTs and wait for other users to buy them. You can sell your tokens on decentralized exchanges like Uniswap. However, token standards have some consequences.
For example, if a user sells a token, the associated NFT will be destroyed. This dynamic, where a new NFT is created upon purchase of a full token, has led to a significant surge in trading volume on decentralized exchanges as users try to roll back and obtain the red replicants, the highest rarity tier. This was very beneficial to liquidity providers in the token’s Uniswap pool. A 1% fee on transactions executed in this pool represents less than $1 million in fees collected since February 3.
Pandora soars to unprecedented heights.
Meanwhile, the PANDORA token has surged to unprecedented levels and is currently trading at $21,344, up over 126% in the last 24 hours, with traders making huge profits. On February 6, Lookonchain tweeted about a trader who made $1.2 million in profits in just two days. This was when the token was trading at $8600.
“The price of #Pandora, the first token built on the #ERC404 token standard, has now risen to over $8,600. One trader made a total profit of $1.2 million in just 2 days on #Pandora! The trader bought 154 #Pandora 2 days ago using 97,484 $USDT for $633 and 1 hour ago sold 25 #Pandora for $7,548 for 188,695 $USDT, realizing a profit of 91,211 $USDT. The trader currently holds 129. #Pandora ($1.1 million), unrealized profit is $1.1 million.”
Disclaimer: This article is provided for informational purposes only. It is not provided or intended to be used as legal, tax, investment, financial or other advice.