In a daring move indicative of the fervor surrounding cryptocurrency markets, a crypto investor recently made headlines by spending a staggering $113,000 in gas fees to snipe the launch of a new ERC-404 token.
The investor, aiming to seize an opportunity in the rapidly evolving landscape of crypto assets, transferred 10 ETH (approximately $26,000) to a smart contract address, initiating a sequence of transactions that ultimately led to the acquisition of 30 NO tokens.
The NO token, however, experienced a meteoric rise and subsequent crash in a mere 35 minutes. Initially trading at $6.80, its price skyrocketed to an astounding peak of around $70,000 before swiftly plummeting back to near-zero levels. This rollercoaster ride left the investor reeling, as the token’s value evaporated almost as quickly as it had materialized.
The ERC-404 token standard, while experimental and unofficial, has gained traction within the crypto community for its attempt to merge the functionalities of ERC-721 nonfungible tokens (NFTs) with ERC-20 tokens.
This innovation allows for the fractionalization of NFTs, enabling multiple parties to own and trade portions of a single NFT. However, with innovation comes risk, as demonstrated by the swift rise and fall of the NO token.
Despite the potential for high returns, the speculative nature of ERC-404 tokens comes with inherent risks. The NO token, in particular, received a safety score of 0 out of 100 and was flagged as “high risk” by blockchain analytics service Crypto Monkey.
Concerns were raised regarding the concentration of token ownership, with just two addresses holding 90% of the token supply. Such warnings underscore the importance of thorough due diligence before engaging in high-stakes investments within the crypto space.
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