The Decline of ERC404 and the Rise of ERC-X

Contents of this article

Improved ERC404
Miner launches improved protocol ERC-X
ERC404Plus
What is the leader Pandora doing?
in conclusion
Last week , ERC404 became one of the hottest topics, and Ethereum Gas also remained high due to the successive launch of various ERC404 projects. The average Swap fee during peak periods was about 40~50 USDT.

However, this week, the popularity of ERC404 began to decline rapidly. The leading project PANDORA fell by about 52% compared with its peak. The remaining ERC404 projects experienced earlier and larger declines, and some of them almost reached zero.

Today, some projects announced the launch of an improved version of the ERC 404 protocol. Can the new iteration boost community confidence?

Improved ERC404
What are the problems with ERC404?

Among them, the most intuitive one for users is the Gas problem. Compared with conventional ERC20 token transactions, the cost is much higher, and it is more prominent on networks with limited performance such as Ethereum.

Slow Mist Cosine once said: ERC404 has also developed a whitelist mechanism so that some pairs/routers do not have to deal with NFT frequently and can just handle the FT transaction. Anyway, the accounts are in the contract and cannot disappear. On the other hand, because ERC404 is a new mechanism, there are potential security risks. Although there have been no large-scale attacks yet, this will remain to be tested over time.

Miner launches improved protocol ERC-X
Miner launched a new protocol ERC-X based on ERC404, and also released the first token MINER based on ERC-X, with a total supply of 100,000 TOKEN/NFT. Miner said that ERC-X is an optimized experimental standard with the following features and functions:

Versatility: Multiple standard functions can be used in ERC-X, including ERC20, ERC404, ERC721, ERC721A, ERC721Psi, ERC1155 and ERC1155Delta, etc.

Low Gas: ERC-X has high gas efficiency and can fully scale the suite according to the size of the project.

Note: Previously, ERC 404 could not be adapted to high-volume tokens, because high total volume means that the price of a single currency is not high, but ERC 404 will cause high Gas per unit quantity.

Comprehensiveness, variability: All standard features of ERC 20 are reintroduced. With a few lines of code changes, the token's NFT counterpart can appear as ERC 721 or ERC 1155.

The most critical improvement is its Gas friendliness, which meets the high total token demand that the original ERC 404 could not adapt to. Miner said it originally planned to set the total supply of MINER at 1 million, but Metamask kept crashing because it couldn't handle the purchase of more than 30,000 NFTs at a time, so it decided to limit the supply to 100,000.

ERC404Plus
The Bitcoin chain game project Bitcoin Cats published a document on the X platform stating that it proposed an optimization protocol for ERC404 called ERC404Plus. ERC404Plus allows users to choose between NFT and FT more flexibly, and greatly reduces the gas required for transactions and transfers.

BitcoinCats404 is the first asset built using the ERC404Plus protocol and can only be minted by bridging Ordinals’ BitcoinCats NFT before the deadline. The distribution and sale of the converted NFT will start on February 16, and the converted NFT can be traded on Uniswap, Blur, OpenSea and other platforms.

Note: BitcoinCats NFT is a BTC NFT project launched by Bitcoin Cats in early January. There is a risk of selling pressure from early holders. Readers are advised to participate with caution.

Apart from the above information, Bitcoin Cats has not released any further feature details, but it can be seen that the core improvement direction is still to reduce transaction gas.

What is the leader Pandora doing?
Pandora, the leading ERC 404 project, has recently done some work in maintaining token liquidity. For example, today, Pandora Labs announced that Wasabi Protocol has become its 404 ecological partner. Wasabi is an on-chain leveraged trading protocol that allows users to long or short PANDORA with a maximum leverage of three times.

Yesterday, Pandora also locked a large amount of liquidity for the tokens, including 5,623 WETH and 725 PANDORA, of which the value of ETH is approximately US$14 million.

Most importantly, Pandora announced a series of improvements, including:

Systematically improve ERC404 design and implementation to move closer to standardization
Add a pool that supports permanent token ID
Improved branching logic to reduce gas costs for some common transfer situations
Improved integration capabilities and issuance of external protocols
Token licensing by supporting EIP-2612
Pandora said that after completing these improvements, it will be able to better interface with external protocols and enable more use cases.

in conclusion
Although the concept of integrating graphics and currency is not proposed by Pandora for the first time, the popularity of ERC 404 proves that its implementation idea has certain value. After solving the pain point problem of high Gas, it is expected to achieve secondary growth in value through more use case support.