ERC-404: What is it?

This new token standard, launched by the pseudonymous “ctrl” and “Acme,” is like ERC-20 and ERC-721 had a blockchain baby. It lets you fractionalize NFTs, blending the worlds of fungibility and nonfungibility. So now, instead of just holding one-of-a-kind digital art, you can own and trade tiny slices of it. Think of it as a hybrid token that switches between being a currency and a collectible.

Unlike older methods, ERC-404 doesn’t need third-party protocols to manage fractional NFTs—smart contracts do all the heavy lifting. This means you can trade fractions of an NFT with real-time price accuracy, making the NFT ecosystem more liquid than ever. 🤑

But there’s a catch: ERC-404 is still experimental and not yet officially recognized by Ethereum. This makes it a playground for early adopters, but also a risky one. Plus, the first project using ERC-404, Pandora, saw a wild price drop, which shows the volatility.

Curious to see how this plays out? Could ERC-404 be the next big thing in DeFi?