ERC-404: Next 100X Cryptos?! What You Need To Know!

Summary

The video discusses the controversial new ERC-404 token standard that combines NFTs and fungible tokens to create tokenized NFTs. It emerged from a failed project called Emerald and was created by developers Control, Acme, and CERN to realize the promise of fractionalized NFT ownership. ERC-404s allow NFTs to be split into tradable fungible tokens, improving liquidity. However, as an unofficial standard, ERC-404s come with high risks like exploits, scams, and extreme volatility. The video explores the origins, workings, opportunities and risks of this highly speculative new asset class that could reshape crypto’s NFT industry.

Takeaways

• 😲 ERC 404 tokens combine features of ERC-20 tokens and ERC-721 NFTs to create tokenized NFTs
• 😎 The ERC 404 standard was created by the Pandora project after the original Emerald project failed due to relying on AI-generated code
• ⚠️ ERC 404 tokens are highly speculative and risky since the standard is unofficial and experimental
• 📈 ERC 404 tokens enable fractionalized ownership of NFTs, improving liquidity
• 🔀 Owning a percentage of an ERC 404 token burns the associated NFT until 100% ownership recombines the NFT
• 🔎 Bad actors may create scam projects around ERC 404 tokens due to hype and lack of regulation
• 💡 The open-source nature of ERC 404 means it could be implemented on other blockchains besides Ethereum
• 🤑 Retail investor hype and hype cycles could greatly impact volatility and demand for ERC 404 tokens
• 📉 Possible exploits due to the experimental and unapproved nature of ERC 404 present unknown risks
• ⏱ ERC 404 tokens could be a catalyst to revitalize interest and adoption in the NFT space

Q & A

What is an ERC token standard?

An ERC token standard is a set of rules that define a particular type of token on the Ethereum blockchain. Some common ERC standards include ERC-20 for fungible tokens and ERC-721 for non-fungible tokens (NFTs).

What problem does the ERC-404 standard aim to solve?

The ERC-404 standard aims to solve the illiquidity and oversaturation issues in the NFT market by allowing NFTs to be fractionalized into ERC-20 tokens, making them more accessible and tradable for regular investors.

How exactly does the ERC-404 standard work?

The ERC-404 standard works by breaking down an NFT into smaller ERC-20 token fractions that represent ownership of the NFT. The NFT is only minted if someone owns all the fractions.

What are some of the main risks associated with ERC-404 tokens?

Some main risks are that ERC-404 is still experimental and unofficial, so there could be exploits, it attracts bad actors due to hype, and it relies largely on emotional retail investors who could leave abruptly.

What should I look for if I want to invest in quality ERC-404 projects?

You should look for projects listed on sites like CoinMarketCap and CoinGecko, analyze metrics like market cap and volume, examine the NFT art and team quality, and watch for red flags.

Could ERC-404 help make NFT investing more accessible?

Yes, ERC-404 could allow more investors to gradually buy into expensive NFTs over time via the fractional tokens, instead of needing the large upfront capital.

What future developments could occur with ERC-404?

Developers may build on the concept across other blockchains, add their own innovations, get institutional backing, and potentially see top projects get listed on major exchanges.

Who created the ERC-404 standard originally?

The ERC-404 standard was originally created by a project called Pandora, which was started by developers 'control' and 'acme' after an earlier failed attempt called Emerald.

Why is the standard called ERC-404?

It's named after the 404 error message on the internet for something that can't be found. This represents its experimental nature that may confuse protocols.

What should I do if I still have questions about ERC-404 tokens?

You should conduct further research, consult an expert if needed, only invest what you can afford to lose, and carefully weigh the risks versus the potential rewards.

Outlines

00:00

😀 Example Title 1

Detailed summary of the key points in paragraph 1.

05:03

😯 Example Title 2

In-depth overview of the content covered in paragraph 2.

Keywords

💡ERC-404 token

An ERC-404 token is an experimental new type of token that combines aspects of fungible ERC-20 tokens and non-fungible ERC-721 NFTs. It allows NFTs to be 'fractionalized' or split into multiple fungible tokens. This makes NFTs more accessible and tradable for regular crypto investors. The video explores how this controversial new standard could reshape the NFT market by improving liquidity and opening up more trading opportunities.

💡fractionalized NFTs

Fractionalized NFTs refer to splitting an NFT into multiple fungible ERC-20 tokens to allow more investors to own a portion of the NFT. This improves liquidity as more people can afford a fraction rather than having to pay for the whole NFT. The ERC-404 standard facilitates fractionalized NFT trading in a standardized way.

💡liquidity

Liquidity refers to how easily an asset can be bought and sold without significantly impacting the price. NFTs often suffer from low liquidity as there are few buyers willing to pay high prices. Fractionalized NFTs improve liquidity as more investors can own and trade portions of an NFT.

💡Retail investors

Retail investors refer to regular, non-institutional crypto traders and speculators. The video argues ERC-404 tokens are driven largely by retail hype and speculation so far, making prices very volatile.

💡Rug pulls

A rug pull is when crypto developers abandon a project and steal investors' funds. The video warns that the experimental nature of ERC-404 tokens makes them prime targets for rug pulls by bad actors.

💡Exploits

An exploit refers to a hack that takes advantage of vulnerabilities in a cryptocurrency's code. As ERC-404 is not an officially approved standard, the video notes there could be unknown risks of exploits.

💡FOMO

FOMO stands for 'fear of missing out' and drives speculative hype cycles in crypto. The video cautions that ERC-404 tokens are very risky and investors should not let their FOMO override rational judgement.

💡Shiny object syndrome

This refers to investors constantly chasing the latest speculative crypto fads. The video asks whether ERC-404 is just another shiny object distraction or a genuinely promising development for NFTs.

💡DCA

DCA stands for dollar cost averaging and means periodically investing fixed dollar amounts over time. The video notes ERC-404 tokens allow investors to DCA into expensive NFTs over time.

💡Catalyst

A catalyst is something that causes significant change or growth. The video asks if ERC-404 tokens could be the catalyst that finally wakes up and spurs adoption for the sleepy NFT market.

Highlights

ERC 404 tokens combine NFTs and tokens to create tokenized NFTs

The concept came from a previous project called Emerald that claimed to allow NFTs and tokens to work together

Developers took Emerald's concept and created Pandora, the first real project to fulfill tokenizing NFTs

The 404 standard combines NFT uniqueness with token fungibility

Fractionalizing NFTs increases liquidity compared to whole NFTs

Owning a fraction of an NFT doesn't give you ownership of the actual NFT

NFT burning/minting with 404 tokens creates rarity and gamification

The 404 standard is controversial since it hasn't gone through official approval

High risk due to experimental nature and potential for exploits

Price volatility is extreme even compared to meme coins

Can buy whole NFTs on marketplaces or fractional tokens on DEXs

Tips for identifying promising 404 projects to invest in

Future potential to improve NFT liquidity and accessibility

Possibility for multi-chain implementations beyond Ethereum

Key focus is high risk but high potential to revolutionize NFTs

Transcripts

a brand new asset class is taking crypto

by

storm ERC 404 tokens have only been with

us for a few weeks and have already seen

some parabolic gains despite them being

controversial to say the least

controversial overbearing that's why in

today's video we'll be looking at this

all new token standard how it could

reshape the nft industry and what it

could mean for the future of the crypto

Market market so if you actively trade

nfts or are considering picking some up

as the bull market gathers Pace then

this is a video you cannot afford to

miss this time we can't afford to

miss now before we get started I'll just

reiterate that ERC 404 tokens are brand

new and consequently come with a high

level of risk therefore it's important

to point out that I am not a financial

adviser and nothing in this video should

be considered Financial or invest M

advice and given the risk levels

involved here I think I'll just point

that out again nothing in this video is

financial advice I'll also point out

that there will be a few projects

mentioned throughout this video in order

to help illustrate how this all new

asset class works these projects are

only mentioned for the sake of this

illustration none of these are

endorsements and the coin Bureau team is

not affiliated with any of them in any

way and if you're wondering what cryptos

the members of the coin Bureau team are

holding as part of their portfolios then

consider joining the coin Bureau Club

there you'll find breakdowns of the

coins and tokens we're holding along

with reviews of some of the hottest

small cap altcoins on the market you'll

also be spoiled rotten with the research

and insights from the team here and

you'll have access to an exclusive

Discord where you can chat to us and

your fellow members of the CBC Elite the

link to all all of that is in the

description so with that all cleared up

let's begin shall we now ERC 404 is a

brand new ERC token standard that's been

blowing up over the last few weeks now

in case you were wondering ERC stands

for ethereum request for comment and is

the standard that defines a particular

asset class it's ethereum's version of a

request for comment or RFC which is a

concept introduced by the internet

engineering task force a well-known

example of an ethereum request for

comment is erc20 which is by far

ethereum's most commonly used standard

the erc20 standard is used for issuing

fungible tokens on ethereum in case you

weren't already aware fungible means of

the same interchangeable value so for

example I could give you one eth in

exchange for your one eth and by the end

of it we'd each still hold the same eth

value as each eth is worth the same

amount now erc20 tokens can be created

for a plethora of different use cases

but they all require a specific

collection of code in order to run this

shared framework is the reason why dexes

like Unis swap can detect tokens when

you copy and paste just the contract

address into them another widely used

token standard meanwhile is ERC 72 one

the non-fungible token or nft standard

unlike erc20 tokens the thing that makes

nfts non-fungible is their uniqueness

and individual value an easy metaphor

for this would be with paintings each

individual painting is by nature one of

a kind with each one having different

unique properties and values you

therefore wouldn't be able to say that

one Mona Lisa is worth one of vanov

sunflowers for example and by the the

way if you're enjoying the video so far

be sure to hit that like button to give

it a boost anywh who similar to erc20

tokens the 721 token standard also needs

to contain specific code in order to

allow for nfts to be built the

difference here is that erc721 is coded

in such a way that the nfts are randomly

generated with each one only being

minted once this is what makes them

unique with each nft having different

features that gives them their

Associated Rarities and values what this

means is that although both erc20 tokens

and erc721 nfts are both great uses for

blockchain technology they are each

their own separate asset class but what

if they didn't have to be well this is

exactly what the ERC 44 token standard

is all about ERC 404 tokens were created

as a means to combine tokens and nfts to

create yep you guessed it tokenized nfts

but where did this idea come from and

what does it all mean it turns out that

the answer to 404s Origins is about as

wild west as you could get so officially

the ERC 404 token standard was created

by a project called Pandora only it

didn't exactly start there Pandora is a

project spearheaded by two pseudonymous

developers going by the names control

and Acme along with another developer

named CERN seal on the 1st of February

control shared a thread on X that

explained just how 404 came into

existence and honestly you couldn't make

this up basically control along with

many other degens had aped into a

previous project named Emerald this

project claimed to present a way for

erc20 tokens and ERC 721 nfts to work

together only before it had a chance to

really take off it got rucked as it

turns out Emerald's so-called developer

had actually used chat GPT to create

this mythical token nft hybrid his

motive he was broke the thing is as

problematic as Emerald's code was and as

shady as the so-called developer was the

concept of integrating nfts and ERC 20

tokens had real promise so as control

explains he reached out to this wannabe

Dev and not only did control offer to

help fix Emerald's code he also put him

in touch with amme an ex coinbase

developer completely for free that is

not an opportunity that comes around

very often and definitely one you

wouldn't want to turn down well it was

turned down instead emeralds well

honestly it feels wrong to call him a

Dev at this stage but anyway suggested

that they instead just relaunch Emerald

with a few quick bug fixes again for a

quick Buck realizing that this guy was

clearly in over his head control got in

touch with Acme and sun to take the idea

and run with it properly they came

together to create Pandora the first

real project to fulfill this Niche

according to an announcement thread on

their X page quote Pandora is the first

token built on the ERC for 4 token

standard an experimental token standard

that we have open sourced for creators

and developers alike as you might have

already guessed Pandora named the token

standard this way as a nod to the error

404 message found when trying to access

something that cannot be retrieved on

the internet in their own words quote

it's a naming convention that was

designed to make ERC 404 easier to Inuit

it as a kind of token with an

experimental design that we knew would

confuse many protocols and daps on

launch as a result of its experimental

nature it's worth pointing out however

that whilst this token standard is fresh

out of the gates the concept of

fractionalized nfts has actually been

around for some time in fact we did a

video back in March 2022 that covered

exactly that link below if you're

interested anywh who ERC 404s work by

essentially breaking down an nft into

smaller fractions that take the form of

erc20 tokens similar to how you can

break down one whole BTC into Satoshi

now you may be wondering what the point

of doing this would be so let's pretend

for a moment that you hold one nft say a

JPEG of a rather sophisticated looking

YouTube presenter with laser eyes called

I don't know guy with laser this nft

would have a price attached to it which

ideally would be more than what you had

paid for it yourself for the purpose of

this example let's say that this nft is

is worth $1 million sounds pretty

reasonable to me if I do say so myself

the problem here though is that you then

have to wait for another nft Enthusiast

to have the same level of interest in

guy with laser that you had when you

decided to ape in in the hope that they

are willing to throw that kind of money

at it and even in crypto there aren't

that many people with a Millie in their

back pockets these days anyway the

result of this situation is that nfts

can quickly become El liquid as they

stay on the market for unpredictable

lengths of time waiting for one of the

very limited number of investors with

enough Capital to come along this IL

liquidity combined with an

oversaturation of the nft space is the

main reason why around 95% of all nft

projects are now dead with many people

holding on to jpegs that are now all but

worthless but let's say that this

million doll nft could be split into

100,000 pieces suddenly a lot more

buying opport opportunities become

available to ordinary retail investors

like you and me as people realize that

in order to get exposure to guy whiff

laser they only need to invest

$10 it quickly becomes clear then why

this concept has gotten so many

investors fired up now it is worth

noting that if you did decide to split

guwi laser into fractions and then sell

off 20% of these erc20 tokens you would

only hold 80% of the overall nft and

unless you own the whole thing you don't

technically own it at all that's because

once you sell a portion of an ERC 404

token the nft that's associated with it

gets burned this nft would only be

minted and returned to you once you'd

manage to accumulate the remaining 20%

to make the nft whole again to be clear

tokens Can Be huddled and the associated

nft won't change however if an nft is

burned and remitted it will be a

different nft with a new variety of

features and Rarities this makes Rarity

rrolling an exciting thing for some

investors who see it as something like a

game Pandora is looking to alter this

burning and minting mechanism though as

explained in a GitHub repository

highlighting version 2.0 of the ERC 404

standard the change will see nfts

transferred directly to a wallet instead

in any case the ERC 404 standard has

been mired in controversy

this is mainly because it's still

completely experimental at this point

having gone through none of the usual

steps of being approved as part of an

EIP for reference EIP stands for

ethereum improvement proposal and is the

method whereby developers can suggest

upgrades and features to be implemented

on the ethereum network the 404 standard

never actually went through this process

which means it was never verified nor

approved put simply 404 is not yet an an

official token standard nevertheless

crypto and nft enthusiasts alike have

quickly latched on to the potential that

this product can bring in fact within

just 5 days of Pandora's launch the

project had gone up by over

180x however before you let your fomo

get the better of you there are a few

concerns to keep in mind as the 404

space becomes more and more heated up

Bad actors will be looking to take full

advantage there's no doubt that we will

see plenty of scams and rug PS popping

up as time goes on those with the

highest levels of fomo will likely be

the worst impacted so if you are

planning on picking up some of these

tokens please proceed with caution also

recall that the 404 token standard has

never been officially approved or

authorized this means that nobody can

say for sure exactly what will happen

with them in the future put simply the

chances that 404s could suffer an

exploit of some kind are at this point

unknown in case it wasn't already clear

an unknown risk is by its very nature a

very high risk in itself it's also worth

reiterating that ERC 404s are brand new

and highly speculative the vast majority

of these projects adopting the ERC 404

token standard have market caps in the

single million dollar range sometimes

not even that this makes the price

action of these tokens extremely

volatile and if you want evidence of

this look no further than tracking sites

like coin market cap or coin gecko which

show you that prices can move up or down

by as much as 40% in a single day this

makes investing in these tokens

analogous to well memec coin trading and

you could even argue that the fear of

the unknown actually makes 404 tokens

even more of a Gamble and by the way we

recently did a video dedicated to

spotting meme coins with potential the

link is below I

digress now there's also the possibility

that the hype we're seeing could die

down very quickly ERC 404s are highly

speculative at the moment in large part

because well they're the latest shiny

object in the space this makes them

entirely driven by retail investors who

are typically much more emotional and

irrational in their trading than

institutional investors

there is a chance that these retail

investors could rotate away from 404s

Once the next shiny object comes along

and if you're not paying enough

attention you could be left holding the

bag now if none of what we've just gone

over has put you off and you're ready to

YOLO yourself into some 404s then you

probably want to know where to find them

well as it happens there are two options

for you to do this the first option is

to buy the nft itself outright and this

can be done in the same way as buying

normal erc721 nfts by using marketplaces

like openc blur. magic Eden and others

however if you want to buy the

fractionalized erc20 tokens instead this

can be done in the same way that you

would buy other erc20 tokens by using

aex such as uni swap Sushi swap or 1 in

and so on searching for the most

promising project within this Niche is

tricky at this stage but here are a few

tips that could help you along the way

first take a look at projects listed on

coin market cap and coin gecko this will

immediately help reduce some of the

risks mentioned earlier as tracking

sites will have certain criteria that

need to be met before projects can be

listed from there go through each

project and look at some key metrics

market cap trading volume liquidity

price history all that good stuff pay

extra attention to which Exchange

changes are listing the project as these

would have imposed even more listing

criteria then take a look at the nfts

themselves do they look like they'll

gain any traction or are they similar to

some of the atrocities that we've seen

in the past would you be a proud owner

of this artwork and could other people

feel the same way you also want to make

sure there's only one of each nft in

existence with no options to Mint more

in the future and remember

look for anything that you think could

be a red flag bad artwork Shady teams

poorly designed websites basically

anything that looks like a project

that's just jumping on the bandwagon for

some quick gains another approach to

take is similar to the memec coin

approach that we highlighted in our

recent video which I'll remind you can

be found

below take a look at already existing

nft projects and see if there are any

signs that indicate plans to use the ERC

404 Tech in the future as this could

bring in a renewed wave of Interest

whichever approach you take though the

risks you're taking on should always be

at the front of your mind so it is extra

important to Dy before making any

decisions and of course don't invest

more than you can afford to lose now

while ERC 404 is an unofficial token

standard at this stage the opportunities

it brings to the nft space

are pretty promising consider this

there's an nft that you've fallen in

love with but it costs a few thousand

and you can only afford to invest a few

hundred every month well 404 means that

you could DCA your way into holding that

nft or a significant chunk of it over

time you might then want to DCA out of

the nft if you felt like the price still

had some room to grow but wanted some

extra liquidity in the meantime with

with ERC 404 that is entirely possible

and if later on you wanted your nft back

in its entirety you only need to buy

back a portion of it rather than paying

for the whole thing this makes 404 a

very exciting prospect and it's worth

remembering that erc's are only used on

ethereum so it wouldn't be at all

surprising if we see other developers

use the same technology on different

blockchains it is open source after all

with the recent hype around Bitcoin

ordinals we can probably expect to see

something like BRC 404 implemented

before too long and of course these

versions will only see the overall 404

space improve over time developers will

be able to flesh out the concept by

adding to it with their own ideas some

of which maybe won't work so well but

others which could be gamechanging if

404s are accepted as an official token

standard meanwhile we could see a surge

in development as more projects adopt

this technology and some projects could

even find themselves being listed on

centralized exchanges such as coinbase

or binance so regardless of how

controversial the ERC 404 standard has

become there's no denying that it's a

fascinating concept and one that's

definitely worth keeping on your radar

if you're an avid nft Trader then you'll

probably appreciate more than most just

how much more tradable they could become

and some might even argue that the nft

space has been sleeping while it waits

for something like this to appear this

makes 404s perhaps one of the most

important developments in the entire nft

ecosystem could they be the Catalyst to

finally wake it

up and that's all for today's video

folks but we want to hear now from you

what do you think the future of ERC 404s

will look like do you think this Niche

has potential or is it just another

shiny object to distract us until the

next one comes along drop your thoughts

in the comment section below now if you

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so much for watching and I'll see you in

the next one this is Guy signing off

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