Original - Odaily

Author - Nan Zhi

In early February, the ERC-404 standard pioneered by Pandora set off a wave of exploration of the combination model of FT and NFT. The market value of PANDORA tokens was onceBreaking through $300 million, but due to mechanism and application problems, the price will inevitably fall back and the market volume will gradually decrease.

First of all, in terms of mechanism, the initial ERC-404 had problems such as high gas costs and inability to adapt to high total tokens. In terms of application, PANDORA itself has no use cases and is more of a hype asset.At present, the questions of why to buy it and what are the advantages of using ERC-404 compared with the original technical form have not been effectively solved., still need to explore the combination with other applications, protocols or tracks.

Odaily will summarize in this article recent projects that have improved or implemented and combined ERC-404, including mechanisms and applications, to explore future trends.

Updated ERC-404 mechanism to improve NFT trading experience

In early February, a series of projects emerged to improve the ease of use of ERC-404 itself, including reducing gas costs, expanding capabilities, etc. A series of improved protocols such as DN 404 and Miner were born.

recently,UnderworldLaunched BT 404 and corresponding assets in partnership with Floor Protocol, once again gained a certain amount of popularity and attention, with the unit price once exceeding 2,000 USDT, and the floor price as of publication was approximately 700 USDT.

So what is the BT 404 and in what ways has it been improved?

The current main improvement point of BT 404 is to provide NFT locking function and transaction fee sharing function.

First of all, in the NFT dimension, under the native ERC-404 protocol, when the number of token holdings changes beyond an integer, the holder will gain or lose NFT, but the distribution of NFT and the corresponding rarity are random, and the user experience is similar to Drawing blind boxes has both positive and negative effects on users. In this regard, BT 404 provides NFT locking and unlocking functions, giving users more options to keep NFTs. However, as the amount of locked rare NFTs increases, new purchasers will also lose the possibility of obtaining rare versions.

In addition, Underworld has established a P2P market for NFT transactions and added a transaction fee sharing function to BT 404. The transaction fees will be 100% allocated to users, and users will receive a share based on the proportion of their number of pending orders in the market to the total number of pending orders. .

Based on the above improvements, BT 404 retains the ERC-404 characteristics of providing higher liquidity for NFTs while improving the certainty of transaction objects. Initially, it is simply an enhancement to NFT transactions.Answers the question What are the advantages compared to the original technical form, but does not improve more on Why buy。

Combined with Meme narratives to bring native purchasing power to assets

according toOfficial Medium DocumentationIntroduction: Color Protocol is an ERC-404 conversion protocol for Meme tokens, which allows existing ERC-20 standardized Meme tokens to be converted into the ERC-404 standard. This protocol provides a new asset issuance for Meme art creators. method, linking their creative works with native Meme tokens.

The specific operating process is that Meme creators or token communities can create ERC-404 standard art assets through Color Protocol, and then Meme token holders can convert native tokens into these assets and use them when needed. When using the ERC-404 mechanism, it is converted into native tokens again.

Going back to the first two questions, Meme tokens, in addition to convincing people with their rising prices,Many tokens also have their own consensus building requirements, so these converted assets haveNatural purchasing needs answer the question “Why buy?”. In terms of what are the advantages compared with the original technical form, the document states that creations in the form of NFT have problems of low liquidity and isolated value (that is, it has nothing to do with the market value of the Meme token itself). The combination model using ERC-404 can provide liquidity for assets and connect the value of artworks with the market value of Meme. Meme has the characteristics of high growth rate and high ceiling, bringing the possibility of simultaneous high growth to creative works and protocols.

Game asset application, transforming the props trading market

In what fields can ERC-404 be used? Combining with chain games was one of the directions that was imagined when it was born in February, and recently some projects have begun to adopt this standard. There is no need to elaborate too much on the purchase requirements of game assets and props. What benefits will it bring if game assets are in the form of ERC-404 instead of the traditional ERC-721? The answer still lies in the liquidity of the asset.

Previous game assets required the project party to build its own P2P trading market or trade through some general NFT trading platforms, which had problems of low efficiency, poor liquidity, and price differences. After converting the assets to ERC-404, both users and project parties can create LP pool of assets,Eliminates the need for peer-to-peer counterparties and can bring better liquidity, to promote asset value discovery.

In addition, transactions in the NFT trading market often require transaction taxes to be paid to the project party, while the token LP pool is expected to waive this fee, or evenBring additional benefits to users who provide liquidity。

Recently, for example, Fusionist, led by Binance Labs, launched ACE Avatar (PeACE), which has various rights and interests such as PFP, DEX and market tax receipts. Base ecological chain game Ether Orb launched the game asset ORB, both of which adopt ERC-404 The standard construction has become the first step for ERC-404 to be implemented in the game ecosystem.

Pandora releases Launchpad, where is ERC-404 heading?

Yesterday, Pandora released Launchpad. No specific details have been announced yet, but it can be seen from its promotional video that it will have the ability to quickly release ERC-404 standard tokens and token management functions, further lowering the entry barrier.

From the latest cases mentioned above, we can conclude that ERC-404 can give assets a high degree of liquidity, which is a fundamental difference from traditional NFTs.However, the agreement still needs to be combined with other tracks to bring a steady stream of purchasing power to the assets.. And the combined field and narrative may become another key. Whether it is Meme or chain games, the scale of the track exceeds 10 billion US dollars. If it can bring a disruptive experience to the users, it may be possible to give birth to several heads again. protocol.