Emergence of DN-404: A Counterpart to ERC-404 NFT Standard
A new Non-Fungible Token standard named DN-404 has surfaced, promising heightened efficiency and a 20% reduction in gas fees compared to ERC-404.
Understanding ERC-404
ERC-404 introduces a novel concept within the crypto sphere, amalgamating ERC-20 (Token) and ERC-721 (NFT) standards. In essence, ERC-404 enables an NFT to be held akin to a conventional NFT but transacted in fractional units resembling fungible tokens.
Introduced by the Pandora development team on February 2, 2024, ERC-404 swiftly garnered attention for its innovative mechanism and is anticipated to catalyze new trading trends across the NFT community.
The primary drawback of ERC-404 lies in its elevated gas fees. Its fragmentation mechanism can significantly impact Ethereum's network by increasing gas consumption, although this serves to benefit validators and the Ethereum Foundation.
Additionally, ERC-404 faces challenges regarding NFT integrity. For instance, purchasers must hold sufficient ERC-20 tokens to mint an NFT; otherwise, these tokens could be repurposed for alternative uses such as collateral.
Introduction of DN-404: A Refined Approach
A more refined iteration, DN-404, was introduced on February 12, aiming to alleviate the 20% gas fee burden on Ethereum's network.
Excited to launch the "Divisible NFT" standard (DN404) which aims to be a hybrid ERC20/721 token.
— cygaar (@0xCygaar) February 12, 2024
ERC404 took the crypto world by storm over the past few days, but it doesn't follow existing standards, is inefficient, and breaks at certain edge cases.
Here's how DN404 works 🧵: pic.twitter.com/3kj504Gb97
Developed by cygaar, DN-404 aims to enhance ERC-404 by bifurcating ERC-20 and ERC-721 into distinct contracts, effectively addressing prevalent issues.
cygaar, the developer behind DN-404, articulated: "The foundation of ERC-404 is to establish a solitary contract capable of functioning both as a replaceable and irreplaceable token. However, this necessitates refinement and the dissolution of existing standards. Our approach with DN-404 will involve employing two contracts - ERC-20 and ERC-721." Consequently, DN-404 will partition ERC-20 and ERC-721 into segregated contracts, thereby resolving certain concerns.
"As a result, normalcy is restored. Both ERC-721 and ERC-20 contracts exist and operate autonomously, albeit unified within a singular system," cygaar underscored in DN-404's inaugural announcement.
Introducing DN404: a solution to the critical issues arising from the newly popular "ERC404" tokens.
— Quit (@0xQuit) February 12, 2024
Huge shoutout to the all-star team who has worked around the clock for days to make this a reality:@0xQuit@0xCygaar@optimizoor@0xjustadev@PopPunkOnChain@AmadiMichaels
And…
Nevertheless, evelopers caution that DN-404 remains unaudited, signifying potential risks. Unlike ERC-404's hybrid token-NFT initiative, they have yet to introduce DN-404's integrated product.
In summary, the concept of fragmenting NFTs in this manner remains nascent in the market, with many viewing it as a transient trend, akin to previous cycles of boom and bust.
