Although not an “official” token standard, ERC-404 hasn’t hindered developers from replicating Pandora’s success just a week after release.
Pandora has witnessed a remarkable surge of over 30% in the last 24 hours amid a broader market resurgence.
This increase can be attributed to recent announcements by crypto wallets from renowned exchanges like Binance and OKX, which emphasized the inclusion of support for the ERC-404 token standard.
The ERC-404 Token Standard
Based on data from CoinGecko, the Pandora token peaked at $32,427 today, marking a 35% increase in the past 24 hours. Its current trading price is $29,847, with a market capitalization of $306 million.
Created by pseudonymous developers known as “ctrl” and “Acme” under a project called Pandora, ERC-404 is an innovative token standard developed on the Ethereum blockchain, aiming to merge the functionalities of both ERC-20 (fungible tokens) and ERC-721 (non-fungible tokens or NFTs) standards. This integration allows ERC-404 tokens to possess characteristics of both types.
As stated on GitHub, “While these two standards are not designed to be mixed, this implementation strives to do so in as robust a manner as possible while minimizing tradeoffs.”
Pandora, the pioneering project behind the ERC-404 token standard, offers 10,000 ERC-20 tokens alongside 10,000 associated “Replicant” NFTs. One Replicant NFT is generated in the buyer’s wallet when purchasing a complete Pandora token on an exchange.
Meanwhile, selling a Pandora token results in the associated NFT being removed or “burned” from the user’s possession. This mechanism creates a symbiotic relationship between the fungible and non-fungible aspects of the token ecosystem within the Pandora project.
Despite its potential, Pandora emphasizes that the ERC-404 standard is “entirely experimental and unaudited” despite having undergone some preliminary testing. However, the project reassures the community that an independent audit is underway to bolster its reliability and security.
Community Skepticism and Concerns
There is still some skepticism in the community as doubts regarding the project’s specifics persist, with some even questioning the necessity of ERC-404’s existence. Recent discussions, including a February 8th post by a developer identified as “quit,” have raised concerns about potential vulnerabilities within ERC-404-based NFTs.
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8/ Now, remember how Pandora uses the max token ID to determine what kind of transfer to execute.
Also remember that depositor 2 has 1*10^18 tokens to available to withdraw.
Let’s withdraw some of those tokens. Not all, but just a small fraction…like maybe 38,916 of them.
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9/ You might be able to guess what happens.
This is a valid withdrawal amount, because the depositor has a balance much higher than the request.
However, Pandora interprets it as an ERC721 transfer, and thus our token depositor is able to steal the NFT from our NFT depositor.
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The post suggested that NFTs using the ERC-404 standard could be susceptible to theft if deposited into lending protocols not properly configured for ERC-404, highlighting potential security risks.
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Number 2 on a seemingly endless list of airdrops for Pandora holders is @FroggyFriendNFT
Excited to see more established ERC721 collections build with ERC404. 2% of the collection will be airdropped to our holders
Froggy Friends
@FroggyFriendNFT
It’s Official, Froggy Friends is launching an experimental ERC404 collection inspired by @Pandora_ERC404.
As we become early adopters of the new token standard, we look forward to connecting with builders in this space and breaking new ground.
As a token of our appreciation…
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Despite these challenges, the ERC-404 standard has sparked interest across various crypto communities. Several collections have begun experimenting with the new standard, including a frog-themed version of the DeGods NFT collection and a collection of ERC-404-based NFT pet rocks.