DN404 introduces enhanced hybrid token and NFT standard, challenging ERC-404


  • DN404, a new token standard, makes trading NFT fractions easier and more secure.
  • It fixes issues seen in ERC-404 and offers smoother transactions with its two-contract system.
  • While promising, users should be cautious as DN404 hasn’t undergone formal audits yet.

In a rapidly evolving blockchain technology landscape, developers have unveiled DN404, a novel hybrid token, and NFT standard, positioning it as a significant improvement over its predecessor, ERC-404. This new standard aims to offer enhanced efficiency and functionality, addressing the shortcomings observed in ERC-404.

Enhanced functionality and efficiency

DN404, spearheaded by a group of developers, introduces the concept of “Divisible NFTs,” blending the features of ERC-20 and ERC-721 tokens seamlessly. Unlike ERC-404, which has faced criticism for inefficiencies and non-compliance with existing standards, DN404 offers a streamlined approach.

According to pseudonymous developer “cygaar,” the core objective behind DN404 was to create a token standard with built-in fractionalization capabilities, eliminating the need for additional protocols to ensure proper functionality. DN404 achieves this by utilizing a base ERC-20 contract and a mirror ERC-721 contract.

Simplified trading mechanism

The trading mechanism of DN404 revolves around the ERC-20 token contract, facilitating the seamless exchange of fractionalized portions of NFTs. When base ERC-20 tokens are transferred, corresponding mirrored NFTs are automatically burned and minted, ensuring a fluid trading experience for users.

Cygaar further elucidated that NFTs are allocated to wallets holding at least one base unit of the token. At the same time, they are burned if the wallet balance falls below the minimum requirement. This innovative approach enables users to trade NFT fractions without intermediaries, fostering a decentralized trading environment.

Security considerations and future outlook

Despite the promising features of DN404, developers caution users about the lack of formal auditing, emphasizing the importance of exercising caution when engaging with the protocol. Recent concerns raised by developers regarding potential vulnerabilities in ERC-404 highlight the critical need for robust security measures within the blockchain ecosystem.

In response to these concerns, ERC-404 developer “ctrl” defended the standard, attributing the vulnerabilities to improper implementation rather than inherent flaws in the protocol. Additionally, ongoing efforts by projects like Pandora aim to address integration issues and enhance the maturity of ERC-404, ensuring greater resilience against potential exploits.

Disclaimer. The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decision.

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James Kinoti

A crypto enthusiast, James finds pleasure in sharing knowledge on fintech, cryptocurrency as well as blockchain and frontier technologies. The latest innovations in the crypto industry, crypto gaming, AI, blockchain technology, and other technologies are his preoccupation. His mission: be on track with transformative applications in various industries.

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