Ethereum Gas Fees Soar As ERC-404 Hype Takes Flight
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Gas fees on Ethereum network rise to eight-month high due to hype surrounding newly enabled “semi-fungible” tokens ERC-404 standard.
according to Data The price of gas from Etherscan has recently been seen playing at an average of 70 gwei (calculated at $60 per transaction), with some transactions reaching up to 377 gwei. Ethereum Gas payments reached this level on May 12, 2023.
ERC-404 tokens were launched on February 5 when the Pandora project used its experimental phase. Other projects followed, such as the DeFrogs and the Monkees.
Token standards serve as formal rules that govern the functionality of digital assets on networks like Ethereum, dictating how tokens can be transferred and interacted with.
ERC-404 tokens offer a unique solution by combining the features of ERC-20 tokens with certain ERC-721 tokens. It offers fractional ownership of existing NFTs, effectively creating a lower entry price for NFT investors.
Although it's an informal standard, projects like Pandora have helped propel ERC-404 to 6,100% growth, with over $474 million in trading volume in one week.
The rise of ERC-404 tokens has raised concerns about the sustainability of such high gas fees. Transactions involving these tokens require more gas than traditional NFT or Ethereum transactions, which can deter users due to high costs.
“This standard is completely untested and unaudited, testing is done in an effort to ensure that performance is as accurate as possible. The overlapping nature of the standards, however, means that combining protocols do not fully understand their combined functions,” explains the ERC-404 GitHub repo.
Critics argue that ERC-404 tokens are a new concept, but their impact on the efficiency and accessibility of the Ethereum network cannot be overstated.
“We're trying to optimize gas because it's part of the larger adoption and integration protocols. So in some cases we can reduce the gas bill by 300% to 400%,” says Arya Kalaj (also known as “ctrl”), lead developer of the Pandora project.
The ERC-404 standard is scheduled for early submission and review, according to College. According to ERC-404's developers, the standard aims to “reflect floor value in real time”, looking at how it will allow “true native liquidity” for tokens.
Discussions in the Ethereum community have paid attention Possible solutions To reduce the impact of high gas bills. These include ideas for optimizing smart contract efficiency and exploring layer-2 scaling solutions. Such measures are meant to ensure that innovations like ERC-404 tokens can coexist with the broader goals of network accessibility and sustainability.
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