ERC-404: Fad or Game-Changer? — Anndy Lian

Anndy Lian
6 min readFeb 23, 2024

Ethereum is a platform that enables developers to create decentralized applications (DApps) using smart contracts, which are self-executing code that can enforce rules and logic. One of the most popular types of DApps on Ethereum are those that deal with tokens, which are digital assets that can represent anything from currencies to collectibles.

There are different standards for creating tokens on Ethereum, such as ERC-20 for fungible tokens and ERC-721 for non-fungible tokens (NFTs). Fungible tokens are interchangeable and divisible, meaning that one token of the same type equals another. For example, one ether (ETH) is equal to another ether. NFTs are unique and indivisible, meaning that each token has its own identity and characteristics. For example, one CryptoKitty is different from another CryptoKitty.

However, there are some limitations and challenges with these existing standards. For instance, ERC-20 tokens lack NFTs’ metadata and customization features, while ERC-721 tokens suffer from low liquidity and high transaction costs due to their rarity and indivisibility. Moreover, there is no easy way to bridge the gap between fungible and non-fungible tokens or create hybrid tokens with both properties.

A New Standard

This is where ERC-404 comes in. This is an unofficial token standard proposed by the Pandora team, a group of developers who launched an NFT collection based on this standard. ERC-404 aims to combine the best of both worlds by treating tokens as fungible or non-fungible, depending on the context and the user’s preference. It also enables unique burn and mint mechanics, creating interesting dynamics and incentives for token holders.

One of the main features of ERC-404 is that it allows tokens to be fractionalized and merged. This means a user can buy or sell a fraction of a token instead of buying or selling the whole token. For example, if a user owns one Pandora token, an ERC-404 token, they can sell 0.1 of it to another user and keep the remaining 0.9. The 0.1 token will still have the same metadata and characteristics as the original token but not the corresponding NFT attached to it. The NFT will only be minted when the user owns a full token or merges their fractions to form a full token.

This feature can create more liquidity and accessibility for NFTs, as users can trade them in smaller units at lower prices. It can also create more diversity and variety for fungible tokens, as users can customize them with different metadata and attributes. For example, a user can create a token representing their favorite sports team and add their logo, colors, and stats. They can then trade it with other fans or use it to access exclusive content or rewards.

Another feature of ERC-404 is that it allows tokens to be burned and minted in different ways. This means a user can destroy their token and create a new one with different properties or create a new one from scratch. For example, if a user owns a Pandora token representing a dragon, they can burn it and mint a new one representing a unicorn. They can also mint a new token without burning an existing one, as long as they pay a fee to the Pandora contract.

This feature can create more innovation and experimentation for token creation, as users can explore different possibilities and combinations. It can also create more value and scarcity for tokens, as users can create unique and rare tokens with high demand and low supply. Another example is a user can create a token that represents a celebrity and add their signature, photo, and voice to it. They can then sell it to their fans or use it to access exclusive content or rewards.

Opening Pandora’s NFT

ERC-404 is a novel and exciting token standard that can potentially revolutionize Ethereum’s token economy. It can create more flexibility and functionality for both fungible and non-fungible tokens, and enable new use cases and applications for them. It can also create more opportunities and challenges for token creators and users, as they can experiment with different token designs and dynamics.

Remember that this is also a very experimental and risky token standard that the Ethereum community has not officially approved or adopted. As mentioned in my blog, it has not been thoroughly tested or audited, and it may have security vulnerabilities or technical issues. It may also face legal or regulatory hurdles, as it may violate intellectual property rights or other laws. Moreover, it may not be compatible or interoperable with other token standards or platforms and may face competition or opposition from other token projects.

Pandora is the first and most prominent token that uses ERC-404, and it has been experiencing a massive surge in popularity and price in the past few days. CoinMarketcap has a separate section called ERC-404 on its main page, with other trending categories such as Solana, Gaming, and DePin.

Pandora is a collection of 404 unique NFTs that represent different mythical creatures, such as dragons, unicorns, and phoenixes. Each Pandora token can be fractionalized and merged and can be burned and minted to create new NFTs. Pandora also has a governance system that allows token holders to vote on the future development and direction of the project.

It has attracted much attention and hype from the crypto community as it showcases the potential and innovation of ERC-404. It has also attracted a lot of speculation and investment from the crypto market, as it has seen a huge increase in its value and volume. According to CoinGecko, Pandora has a market cap of over $175 million and a price of over $16,000 per token as of February 7, 2024. It has also seen a growth of over 2000% in the past week, making it one of the best-performing tokens in the crypto space.

However, Pandora is also a volatile and speculative token that has not proven its long-term viability or sustainability. It has not established a clear vision or roadmap or delivered any concrete products or services. It has also faced much criticism and skepticism from the crypto community, as it has been accused of being a scam, a Ponzi scheme, or a copycat of other NFT projects. It has also faced much competition and pressure from other token projects, especially those that use official or more established token standards.

In conclusion, ERC-404 and Pandora are fascinating and controversial token projects that have generated a lot of buzz and debate in the crypto world. They have both demonstrated the power and potential of token innovation and experimentation and exposed token adoption and regulation risks and challenges. They have created much value and opportunity for token creators and users. Still, they have also created a lot of uncertainty and speculation for token investors and traders. They have both been bullish and excited in the short term but also uncertain and unproven in the long term.

My opinion on ERC-404 and Pandora is that they are worth watching and learning from but worth being cautious and critical of. I think they are both game-changers in the token space and both fads in the token market at this point in time. So, do you think it is a game-changer or a fad?




Anndy Lian

Anndy Lian is an early crypto adopter and experienced serial blockchain entrepreneur. He is also the Book Author of “NFT: From Zero to Hero”.