Just a week later ERC-404 emerged On the blockchain scene, ushering in a new phase of fractional nft ownership, a rival token protocol dubbed 'DN404' (Divisible nft) is coming into the spotlight.
Yesterday, February 12, the enigmatic token programmer known as 'cygaar', along with others, unveiled DN404, positioning it as a formidable adversary to its precursor by similarly merging elements of the ERC-20 and ERC-721 tokens.
Advanced technology synchronizes ERC-20 token transactions with nft states in an ERC-721 contract, automating the creation or deletion of NFTs based on token balances through direct minting and burning.
According to cygaar, the ultimate goal of this initiative is to “create a token standard that can act as an nft with native fractionalization built in.” Besides, he affirms is a “unique ERC-404 unlock that allows users to exchange nft parts without any intermediary.”
Source: X (cygaar)
Security Concerns Casting Doubts on ERC-404
In response, an ERC-404 contributor 'ctrl' confirmed that a refined version of the standard is being developed and will undergo an audit to verify its strengthened integration and improved protection measures.
Despite the novel structure of DN404, cygaar raised an additional signal of caution to potential adopters, announcing in X that “ERC-404 tokens do not really comply with ERC-20 or ERC-721 standards. “It is close to ERC-721, but the balance function is not the same because of the fractions.”
Furthermore, Cygaar states that the “number 404 is very arbitrary. It does not follow the standard EIP numbering process.”
The arrival of DN404 along with security debates related to ERC-404 may profoundly influence the dynamics of nft trading and the evolution of ethereum blockchain standards.
Source: X (cygaar)
