ERC-404 hybrid NFT tokens ‘well positioned’ for EIP push, says Dev
The unofficial and experimental Ethereum standard “ERC-404” – intended to be a hybrid of fungible and non-fungible tokens (NFTs) – is “working around the clock” to submit an Ethereum Improvement Proposal (EIP), according to one of its creators. .
Created by anonymous developers ctrl and Acme under a project called Pandora, the standard technology combines the technology behind ERC-20 hash tokens with ERC-721, which is one-to-one tokens – like the Bored Up Yacht Club (BAYC) collection of NFTs. .
However, despite the moniker, ERC-404 is not audited, and “ERC” is only in name.
Speaking to Cointelegraph, ERC-404 developer ctrl said getting an authorized EIP is “one of the more bureaucratic things you'll do.”
“It's a long process, there's a lot of politics involved. […] The process usually takes two weeks.
Ctrl was tight-lipped about who was making the proposal, saying only that they had “previous success with this” and were “in a very good position” to submit an EIP recently.
ERC-404 aims to tie ERC-721 NFTs to ERC-20 tokens, allowing what some have described as fractional NFTs, allowing multiple wallets to each own a portion of an NFT — like the BAYC NFT — and use that portion. To trade or sell on credit.
The ERC-404 GitHub page says that the standard is experimental and aims to merge the two standards, but the project is to merge as much as possible “in a robust way while reducing competition”.
The denial did not end debate over the safety of the project. In a February 8 X developer post “Abort” claimed NFTs using the ERC-404 standard could be vulnerable to theft by ERC-404 token holders if the NFT is not properly configured for ERC-404 in the lending protocol.
A misconfigured protocol may not distinguish between ERC-404 NFTs and ERC-404 tokens, allowing token depositors to issue NFTs that are not their own.
9/ You can probably guess what will happen.
This is the correct withdrawal rate, because the depositor has a balance much higher than the request.
However, Pandora interprets it as an ERC721 transfer, and therefore our token deposit NFT can steal from our NFT deposit. pic.twitter.com/sQwn9828Jp
— Quit (@0xQuit) February 8, 2024
Speaking to Cointelegraph, Ctrl brushed off the concerns raised in the post, arguing that it “discontinued a contract that misuses ERC-404” and that “there is a vulnerability” as a result.
“It's like posting a picture of the car and explaining how to get in because the door is open.”
Crypto wallets from exchanges Binance and OKX have announced support for ERC-404, adding that “something would have been exploited” if there was a risk of stopping by adding ctrl. Pandora said it is auditing a “more mature iteration of the standard that deals with integration.”
Related: Ethereum Update Aims to Lower L2 TX Costs Mainnet Deployment
Pandora – the first ERC-404 token launched by the project on February 5 – has seen a gain of more than 1,850% in four days and a market value of almost $293 million, according to CoinGecko.
CoinGecko lists 12 projects launched using ERC-404, including the frog-themed DeGods NFT coin with a market capitalization of nearly $30 million and another ERC-404-based NFT collection of pet stones.
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