Original author: Karen, Foresight News

In recent days, a new standard ERC 404, which aims to solve the liquidity of NFT and is between ERC 20 and ERC 721, has attracted community attention. The price of a single Pandora token, the first token based on this standard, continued to reach a new high, soaring to US$5,700. So where does ERC 404 come from? What is it? What other opportunities are there?

Pandora and ERC 404 Standard Background

Pandora is the first token built on the ERC 404 token standard, an open source experimental token standard for creators and developers alike, and a hybrid ERC 20 / ERC 721 implementation with native liquidity and fragmentation characteristics.

Pandora is co-built by @maybectrlfreak (ctrl) and @searnseele (Searn), and the core standard ERC 404 was released on Github by @0x acme (Acme), a former software engineer at Coinbase.

• @maybectrlfreak: Also an angel investor in the startup Syndicate. Syndicates Twitter Profile page shows that Syndicates first tweet was posted on January 22, making early investments in BRC 20 and Ordinals trading terminal BeFi Labs. Since then, no other content has been released except for content related to BeFi Labs.

• @searnseele（Searn）

• @0x acme (Acme): Acme did not mention Pandora in its Twitter profile, but it published the ERC 404 standard on Github (https://github.com/0x acme/ERC 404). Acme previously worked at Coinbase.

When talking about the origin of ERC 404, we have to mention that the EMERALD contract was previously attacked. According to ctrl, at the time, anyone could transfer and deplete assets from any predefined pool. If sent from the pool, the transfer check will be bypassed. This is an obvious flaw in the code and looks like a rug disguised as a vulnerability. In addition, the token transfer logic is very complex, resulting in a mismatch between ERC 20 and ERC 721 balances. ctrl also lost $30,000 because of this, but it believes that the concept is promising and there is a real opportunity for it to exist as a token standard.

Therefore, ctrl and Acme provided problem fixing suggestions to the EMERALD developer after discussion, but the EMERALD developer said that it was not a developer, but used ChatGPT. During the communication process, the EMERALD developers revealed that they were poor and wanted to quickly launch a rug sequel first. After this, ctrl, Acme and Searn decided to relaunch themselves, which is also the origin of Pandora.

What is ERC 404?

According to the ERC 404 standard released by @0x acme, ERC 404 attempts to fuse some features of the ERC-20 standard and the ERC-721 standard, and increases the flow of ERC-721 standard NFT by combining the token divisibility of the ERC-20 standard sex. Currently, ERC 404 has not been audited and is an experimental test.

However, the ERC 404 standard document also points out that the ERC 721 implementation here is slightly non-standard. The tokens will be repeatedly destroyed and minted based on the transfer of the underlying/fragmentation. The purpose is to create a native fragmentation, liquidity and encourage Trade to cultivate NFTs with unique feature sets. That is, if you sell the NFT, you no longer own the tokens, and if you sell the tokens, you no longer own the NFT.

What is Pandora?

Pandora was launched on February 2. It is the first token built based on the ERC 404 token standard, and introduces the generation of Avatar NFT Replicants bound to the Pandora token and based on ERC 404. At a given time, up to There are 10,000 Replicants. In other words, Pandora can be traded on Uniswap or on NFT markets such as OpenSea.

As shown below, there are five rarity levels in the series, distinguished by color. When a user interacts with a Pandora ERC 404 token (not a Replicant NFT), the Replicant NFT may be destroyed or subsequently regenerated. Each Pandora token purchased from the liquidity pool generates a new Replicant. When a Pandora ERC 404 is sold or transferred, its corresponding Replicant will be destroyed and a new Replicant will be generated at the receiving address. Each time a Replicant NFT is regenerated, the rarity is randomized.

In other words, the rarity level, destruction and regeneration features of Replicant NFT can encourage users to trade on third-party markets outside the liquidity pool, or directly refresh the rarity level through transfers.

When a user interacts with a Pandora ERC 404 token (not a Replicant NFT), the Replicant may be destroyed or subsequently regenerated. Each Pandora token purchased from the liquidity pool generates a new Replicant. When a Pandora ERC 404 is sold or transferred, its corresponding Replicant will be destroyed and a new Replicant will be generated at the receiving address. In addition, Pandora will release a feature that allows users to store Replicants so that they are not destroyed or regenerated when transferring Pandora ERC 404.

Security-wise, Pandora is not audited. However, this morning, Pandora announced that it has created a new 2/4 multi-sig for its vault, and will later transfer PANDORA, LP ownership, and valuable assets in the vault to further enhance the process of expanding and building practices. safety.four signatoriesAll have clean hardware wallets set up specifically for executing transactions via multi-signature.

In summary, the ERC 404 standard can achieve the effect of fragmented NFT ownership. It can not only solve the pain point of low liquidity of NFT, but also further unlock the liquidity of NFT through financial methods such as lending and derivatives. It is worthy of our further observation.

ERC 404 Ecology

ANON：ERC-404 inspired NFT token, including 350 pieces of art.

Vector Reserve：Provide on-chain yields by leveraging EigenLayer and Superfluid Staked LPD:vETH. vETH generates income by utilizing EigenLayers Superfluid Stake, which means that vETH allows the re-pledge of ETH LP.

Early this morning, Pandora announced a strategic partnership with Vector Reserve. Both parties will add their respective tokens to their respective vaults, further promote consistency in ecosystem value, and explore how ERC 404 and liquidity expansion derivatives can interact with each other. New ways to benefit.

Palette（@iamcfw）：The first art collection on the ERC 404 standard.

Wasabi Protocol：is an on-chain leverage protocol that supports the innovative ERC 404 standard by introducing perpetual trading to Pandora. Wasabi Protocol said that in addition to ERC 20 and 721, Wasabis composable architecture can support new standards such as ERC 404 from day one.

Froggy Friends：NFT project Froggy Friends announced the strategic purchase of some PANDORA tokens to strengthen its balance sheet.

In addition, currently, OpenSea, Blur, and LooksRare all support Pandora Replicants.

As always, this article does not represent any investment opinion, DYOR.