Ethereum Presents Digital Asset Updates With ERC-404 Token Standards, Combines Tokens And NFTs

Ethereum developer tested the standard ERC-404 token token. (Photo; Doc. NFT Evening)

JAKARTA - Ethereum, the world's second-largest blockchain platform, continues to deliver innovations and new experiments in the field of digital assets. One of them is ERC-404, an unofficial token standard that combines non-fungible and non-fungible tokens, or NFT, in one standard. What are ERC-404 and what are the benefits for developers and investors?

ERC-404 is a standard token created by the Pandora team, a project focused on creating a unique and rare NFT. ERC-404 is a development of previous token standards, namely ERC-20 and ERC-721.

ERC-20 is the most commonly used token standard on Ethereum, which allows the creation of tokens that can be exchanged easily and have the same value. Examples of ERC-20 tokens are USDT, UNI, LINK, and others.

ERC-721 is the standard token used to create NFTs, which are non-exchangeable tokens and have different characteristics. Examples of NFT are CryptoKitties, CryptoPunks, Axie Infinity, and others.

ERC-404 is a token standard that combines these two standards, thus creating semi-fungible tokens, namely tokens that can be exchanged in part or in all, depending on the user's needs and preferences.

Using ERC-404, developers can create NFT collections consisting of multiple tokens associated with one NFT. For example, an NFT that represents a painting can be divided into 100 tokens, each of which has 1% ownership of the painting. These tokens can then be traded on decentralized markets, such as Uniswap, or used as collateral for crypto loans.

The advantage of this standard is the increasing interoperability and liquidity of tokens, as well as the possibility of creating new and innovative economic and application models. In addition, this standard also allows users to have parts of NFTs that may be too expensive or rare to own in full.