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DN-404 developers aim to resolve the gas complications inherent in ERC-404, but still view the effort as a “gimmick” to meet user demand.
A new unofficial ethereum-based cryptocurrency design called ERC-404 emerged on February 2 from a group of pseudonymous developers looking to combine cryptocurrencies and NFTs. Pandora, the first token under this standard, rose over 12,000% in less than a week and rose from $250 to over $30,000 before plummeting.
The experimental effort sought to revolutionize fractional NFTs and improve the liquidity of digital collectibles represented by virtual currencies.
However, ERC-404 came with issues primarily related to gas optimization, with reports that ethereum transaction fees skyrocketed the same week as Pandora's debut. The creators of ERC-404 hinted at updates and improvements, but a group of developers released their iteration to address concerns.
DN-404 versus ERC-404
DN-404 was created to correct inefficiencies with ERC-404 by splitting the token and nft elements into two separate contracts. The developers said that DN-404 also reduces transaction costs by 20%.
The design leverages the ERC-20 token code at its core and an ERC-721 mirror structure for nft functionality, while ERC-404 mixes both sides into a single contract. ERC-404 created the possibility for an nft to split and return differently to its original state.
Our ultimate goal was to create a token standard that could act as an nft with native fractionation built in. This was a unique unlock of ERC-404 that allowed users to exchange nft parts without any intermediary.
CigarDN-404 developer
One of the pseudonymous developers, Cygaar, emphasized that DN-404 is a standard for building protocols rather than a project itself. The open source GitHub The repository is in its alpha stage and has not yet been audited.
