The “divisible NFT” standard aims to be an NFT with native fractionalization built in.
Another day brings another experimental Ethereum token standard.
After the unexpected launch – and hype – of the ERC-404 token standard, a team of Ethereum developers launched DN-404 today, which aims to fix the former’s inefficiencies.
“Our end goal was to create a token standard that could act as an NFT with native fractionalization built in,” wrote pseudonymous developer Cygaar, who appears to have led the team of six developers.
Cygaar wrote a lengthy thread today revealing what the team considers to be ERC-404’s flaws and how their new token standard addresses them.
Building on ERC-404’s ability to allow users to swap portions of their NFTs without a middleman, DN-404 uses two contracts: a “base” ERC-20 token and a “mirror” ERC-721.
According to Cygaar, most trading will take place on the base token. Traders can think of these as fractions of the NFTs, with their main selling point being that they will enable immediate trading on DEXs like Uniswap. When a user has at least one base unit (10^18) of tokens, they will automatically receive an NFT, a “mirror” ERC-721.
Instant trading on NFT exchanges and decentralized exchanges adds liquidity to NFT projects, transforming DN-404 into “an unlock we have never seen before,” said Cygaar.
Today’s launch comes amid traders’ significant interest in ERC-404s last week. Pandora, the first token of its kind, stole the show last week after surging to $32,000 only days after launch – posting a more than 10,000% increase in value. It has since dropped to $19,760, according to DEXscreener.
The team behind DN-404 warned traders that the code has not been formally audited and that there aren’t any tokens associated with their experimental standard.