This article will summarize the ERC-404 protocol and recent developments in Pandora, discussing the current problems faced by ERC-404 and the possible solutions.
(Table of Contents)
Improvements to ERC404
Miner introduces improved protocol ERC-X
ERC404Plus
What is Pandora doing?
Conclusion
Last week, ERC404 became one of the hottest topics, and Ethereum Gas remained high due to the successive launches of various ERC404 projects, with average swap fees ranging from 40 to 50 USDT during peak periods.
However, this week, the popularity of ERC404 started to decline rapidly. The leading project Pandora experienced a decrease of about 52% compared to its peak, while other ERC404 projects had earlier and larger drops, with some almost reaching zero.
Today, some projects announced the release of an improved version of the ERC404 protocol. Can this new iteration boost community confidence?
What problems does ERC404 have?
One of the most obvious issues for users is the Gas problem. Compared to regular ERC20 token transactions, the fees are much higher, and this is even more prominent on networks with limited efficiency like Ethereum.
SlowMist Cosmos once stated that ERC404 also introduced a whitelist mechanism to prevent frequent NFT issues for certain pairs/routers, and it only needs to handle FT transactions since the accounts are all in the contract and cannot disappear. On the other hand, because ERC404 is a new mechanism, there are potential security risks, although there haven’t been any large-scale attack incidents yet, it still needs time to be tested.
Miner has introduced a new protocol called ERC-X based on ERC404 and released the first token MINER built on ERC-X, with a total supply of 100,000 TOKEN/NFT. Miner stated that ERC-X is an optimized experimental standard with the following features:
1. Versatility: Multiple standard functionalities can be used in ERC-X, including ERC20, ERC404, ERC721, ERC721A, ERC721Psi, ERC1155, and ERC1155Delta.
2. Low Gas: ERC-X has high Gas efficiency and can fully scale extensions based on project size.
Note: Previously, ERC404 could not adapt to high total token amounts because high amounts meant low individual token prices, but ERC404 caused high Gas at the unit quantity level.
3. Comprehensive and Variable: All standard functionalities of ERC20 are reintroduced. By making a few changes to the code, the token’s NFT counterpart can be displayed as ERC721 or ERC1155.
The most crucial improvement is its Gas-friendliness, which achieves the high token total demand that ERC404 couldn’t adapt to initially. Miner initially planned to set the total supply of MINER to 1 million, but Metamask kept crashing because it couldn’t handle purchasing more than 30,000 NFTs at once. As a result, the supply was limited to 100,000.
Bitcoin Cats, a blockchain gaming project, proposed an optimized protocol for ERC404 called ERC404Plus. ERC404Plus allows users to choose more flexibly between NFT and FT and greatly reduces the Gas required for transactions and transfers.
BitcoinCats404 is the first asset built using the ERC404Plus protocol and can only be minted by bridging BitcoinCats NFTs with Ordinals before the deadline. The distribution and sale of converted NFTs will start on February 16 and can be traded on platforms such as Uniswap, Blur, and OpenSea.
Note: BitcoinCats NFT is a BTC NFT project launched by Bitcoin Cats in early January, and there is a risk of early holders dumping, so readers should participate with caution.
In addition to the above information, Bitcoin Cats has not disclosed more specific details about the features, but it can be seen that the core improvement direction is still to reduce transaction Gas.
The leading project of ERC404, Pandora, has recently made efforts in maintaining token liquidity. For example, today, Pandora Labs announced Wasabi Protocol as its 404 ecosystem partner. Wasabi is an on-chain leverage trading protocol that allows users to go long or short PANDORA with up to 3x leverage.
Yesterday, Pandora also locked a large amount of liquidity for tokens, including 5,623 WETH and 725 PANDORA tokens, with the value of ETH being approximately $14 million.
Most importantly, Pandora announced a series of improvement directions, including:
1. Systematic improvement of ERC404 design and implementation to be closer to standardization.
2. Adding support for pools with permanent token IDs.
3. Improved branching logic to reduce Gas costs for certain common transfer scenarios.
4. Improved integration functionality and issuance of external protocols.
5. Implementing token permissions through support for EIP-2612.
Pandora stated that after completing these improvements, it will be able to better integrate with external protocols and achieve more use cases.
Although the concept of integrating cryptocurrencies is not the first time Pandora has proposed it, the explosion of ERC404 proves that its implementation approach has certain value. After solving the pain point of high Gas, it is expected to achieve secondary growth in value through support for more use cases.
(Related Reports)
Pandora surges nearly £33,000! Official announcement: Etherscan will support the “ERC-404 contract.”
$Pandora breaks through £31,000! Binance, OKX quickly list ERC-404 market, SlowMist warns that token standards are not yet mature…
Interpreting how the ERC-404 protocol promotes the Ethereum NFT revolution from Pandora’s popularity.