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

Coin Bureau

27 Feb 202421:08

Summary

TLDRThe 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.