New Ethereum Token DN404 Rivals ERC-404 in Fractional NFTs – NFT Plazas
Barely a week after ERC-404 emerged on the blockchain scene — introducing a new phase of fractional NFT ownership — a rival token protocol dubbed ‘DN404’ (Divisible NFT) is stepping into the spotlight.
Yesterday, on February 12, the token’s enigmatic programmer known as ‘cygaar’ — alongside others — unveiled DN404, positioning it as a formidable adversary to its precursor by similarly fusing elements of ERC-20 and ERC-721 tokens.
DN404 combines ERC-20 and ERC-721 standards into a two-part system, with an ERC-20 contract for divisible token shares and an ERC-721 contract for unique NFTs. Its main operations use the ERC-20 framework to divide NFT shares, as explained by cygaar on X.
Advanced technology synchronizes ERC-20 token transactions with NFT states in an ERC-721 contract, automating NFT creation or deletion based on token balances through direct minting and burning.
As per cygaar, the ultimate aim of this initiative is to “create a token standard that could act as an NFT with native fractionalization built in.” Moreover, he states it’s a “unique unlock of ERC-404 that allows users to trade portions of NFTs without any middle man.”
The stability of ERC-404 is under review. A DN404 creator who goes by the name ‘quit’ found a potential security issue that could enable ERC-404 token holders to access NFTs improperly through inadequately prepared lending protocols.
In response, an ERC-404 contributor — ‘ctrl’ — confirmed that a refined version of the standard is under development and will undergo an audit to verify its strengthened integration and enhanced protection measures.
Despite DN404’s novel structure, cygaar raised an additional flag of caution to potential adopters, announcing on X that “ERC-404 tokens don’t really adhere to either ERC-20 or ERC-721 standards. It’s close to ERC-721, but the balance function isn’t the same due to fractions.”
Additionally, cygaar claims that the “404 number is very arbitrary. It doesn’t follow the standard EIP numbering process.”
The advent of DN404 alongside the security debates concerning ERC-404 may profoundly influence the dynamics of NFT trading and the evolution of Ethereum’s blockchain standards.
Both ERC-404 and DN404 reflect the crypto sector’s aim to facilitate the direct trade of fractional NFT ownership. As such, the Web3 community is eagerly awaiting to see which framework will gain widespread acceptance and how it will integrate with NFT and DeFi platforms.
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*All investment/financial opinions expressed by NFT Plazas are from the personal research and experience of our site moderators and are intended as educational material only. Individuals are required to fully research any product prior to making any kind of investment.
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