On February 9, the price of gas on the Ethereum network reached an eight-month high amid interest in the experimental ERC-404 token standard.
On that day, the average reached 70 Gwei (~$60 per standard transaction), and the maximum was 377 Gwei. The last time this level was recorded was May 12, 2023.
The hype around ERC-404 began on February 5th with the release of the Pandora coin. In less than a week, the asset grew by 753% to $16,260, according to CoinGecko. At the time of writing, its daily trading volume is $50 million.
The experimental standard is a mixed implementation of ERC-20/ERC-721, where when you purchase a coin, an NFT also automatically appears on your wallet. At the same time, it allows you to own a fractional part of the so-called “fractional” non-fungible token.
According to the co-founder of gas auditing company Gaslite under the username PopPunk, an ERC-404 transfer requires about 125,000 Gwei – three times more than a regular NFT transaction.
An average ERC404 transfer is 125,000 gas units.
More than 3x the gas of an average ERC721A transfer.
This is nightmare fuel.
Gaslite could either:
1) build a more optimized (and more compliant version of this standard)
2) ignore it and let it fade into the ether
— Pop Punk (@PopPunkOnChain) February 6, 2024
“This is the fuel of horror. Gaslite can either create a more optimized (and more compatible) version of the standard, or ignore it and let it fade into the ether,” he wrote.
On February 9, most of the activity was driven by significant trading volumes generated by Pandora, DeFrogs, and a number of other ERC-404 projects on decentralized exchanges. At the time of writing, the total figure for such tokens exceeds $60 million.
At the same time, after the sharp rise of ERC-404, a correction followed. Over the past 24 hours, almost all tokens of the new standard have fallen by 10-50%.
Previously, the community was concerned about the security risks of ERC-404. A Solidity developer and auditor under the nickname Quit pointed out that there is a threat of exploitation in the code itself. In addition, the standard has not yet been approved by the Ethereum Foundation and the community.
Let us remind you that the significant growth of the Pandora token brought the trader about $1.2 million in two days.
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