Tuesday, February 20, 2024 – A new wave in the Non-Fungible Token (NFT) space emerged with the launch of DN404, an experimental hybrid token and NFT standard. 1
Following on the heels of the ERC-404 standard, which aims to combine fungible and non-fungible functionalities, DN404 takes a different approach.
Claimed as “Divisible NFT,” DN404 seeks to address perceived shortcomings in ERC-404.
Developed by an anonymous team using the pseudonym “cygaar,” the standard utilizes two contracts: A base-level ERC-20 token is mirrored by an ERC-721 NFT contract.
This design, experts say, allows users to trade fractionalized portions of an NFT through ERC-20 transactions, automatically burning and issuing mirrored NFTs accordingly.
Proponents of DN404 argue it offers native fractionalization without relying on complex smart contracts, potentially simplifying transactions and reducing gas fees compared to ERC-404.
Critics remain wary, pointing out the experimental nature of the standard and potential regulatory uncertainties surrounding fractionalized NFTs.
While both DN404 and ERC-404 represent attempts to innovate in the NFT landscape, their long-term success remains to be seen. Both standards face the challenge of attracting developers and gaining user adoption within a rapidly evolving ecosystem. Time will tell whether DN404’s approach resonates with the community and carves out a niche in the competitive world of NFT standards.
