New standards for cryptocurrency ERC are being developed one after another. A new standard called ERC-404 is currently being talked about. Although it is not yet an officially recognized standard, it has the potential to be introduced in many products in the future.

In this article, we’ll talk about ERC-404, how it’s used, and which cryptocurrencies use it.

Please refer to it.

What is ERC-404?

The ERC-404 is a specification that looks like ERC-20 and ERC-721 tied together. In other words, ERC-404 is not a stand-alone token, but a combination of ERC-20 and ERC721. If you have a certain number of ERC-20, an NFT of ERC-721 will be generated.

Features of ERC-404

Specific features of the ERC-404 will be explained with examples.

An NFT is generated and granted when the creator of the ERC-404 has more than a specified number of ERC-20s

An NFT is generated and granted when the creator of the ERC-404 has a certain number of ERC-20s specified by the creator. The number of ERC-20s can be freely specified by the creator.

Example: If you have 5 ERC-20 token A, you will receive a dog NFT.

If you have x times a certain number of designated ERC-20’s, you also get x times the NFT

You will receive NFTs based on a certain number of designated ERC-20s, so for example, if you have 2 or 3 times the designated number of ERC-20s, you will be awarded 2 or 3 NFTs.

Example: Since you have 15 ERC-20 token A, you can receive 3 dog NFTs.

The NFT will be burned if the number of ERC-20s decreases even slightly below a certain number of specified ERC-20s

If the number of ERC-20s decreases even slightly below a certain designated number, the NFT will be burned and no more NFTs will be issued.

Example: You have 15 ERC-20 token A, but you sent one, so you have 14. Then one dog NFT was burned.

When you send the NFT, the corresponding ERC-20s are also sent.

sending a generated NFT will also result in the sending of the corresponding ERC-20s

Example: I sent a dog NFT to a friend. Then, 5 ERC-20 tokens A were also sent.

How ERC-404 can be utilized

From here, we will discuss the potential uses of ERC-404.

Staking

Staking, depending on the specifications, can be a tedious process that requires multiple transactions, including the release of the staking. By using the ERC-404, such troublesome work and transactions can be eliminated. If you have more than a certain number of ERC-20s, you are automatically considered a staking member and will be given an NFT. When the ERC-20 falls below a certain number of copies, the NFT is burned, meaning the staking is released.

It is possible to create an ERC-20 that can automatically be staked simply by having more than a certain number of ERC-20s without requiring any unnecessary transactions. The disadvantage, however, is that all ERC-20 token holders, including those who do not need staking, are considered staking because all those who have more than a certain number of tokens are considered staking.

Stable and rising token prices

Holding a certain number of ERC-20s will give you NFTs, which will reduce token sales and stabilize or increase the price. It also means that as the price of the ERC-20 goes up, the value of the NFT goes up with it.

Game Rewards

It is also possible to have a game where NFTs are automatically awarded when a certain number of ERC-20s are earned and reach a certain number of tokens. Even if the ERC-20 itself has no value, it can create demand as a token that gives NFTs.

ERC-404 token list and prices

Virtual currency tokens associated with ERC-404 include

• Pandora
• DeFrogs
• Rug
• Monarch
• Froggy Friends

For a list of ERC-404-related issues, please click here.

Summary

We have explained ERC-404, which is not an officially recognized standard at this stage, but is already gaining momentum and is a promising new standard. This standard may spread in the future in a variety of applications. Let’s make sure we understand it well now.

We hope this article will be helpful.