A group of developers has released an alternative implementation of the experimental ERC-404 token standard, named DN-404.
Introducing DN404: a solution to the critical issues arising from the newly popular “ERC404” tokens.
Huge shoutout to the all-star team who has worked around the clock for days to make this a reality:@0xQuit@0xCygaar@optimizoor@0xjustadev@PopPunkOnChain@AmadiMichaels
And…
— quit (?,?) (@0xQuit) February 12, 2024
Introduced by the Pandora team in early February, ERC-40 aims to integrate ERC-20 assets and NFTs (ERC-721). The concept involves the native fractionalization of non-fungible tokens, allowing for their parts to be split and merged.
The community has raised concerns about the security of the unaudited standard. Solidity developer and auditor known as Quit noted that ERC-40 generally succeeds in combining the functionalities of the two original protocols. However, issues arise in solutions that differ between the two standards, such as transaction confirmation mechanisms. This opens the possibility for exploits, the expert stated.
Quit joined the team that developed DN-404 as an iteration of the ERC-404 idea without the identified vulnerabilities.
The developers of the alternative applied a two-contract approach—”base” (ERC-20) and “mirror” (ERC-721) instead of a single implementation in the original. According to Quit, this allowed them to function as standalone products with a unified purpose.
The team noted that unlike the initiators of ERC-404, they did not create hybrid tokens based on their solution.
“I want to make it clear: while it was a lot of fun to work on this, I still consider 404 more of a marketing gimmick. However, the community has shown a desire to continue using it. Therefore, we decided it was worth it, but in an efficient and safe implementation,” Quit emphasized.
The price of the Pandora token soared to $22,900 on February 8. At the time of writing, the asset is trading near $23,100 (CoinGecko).
The frenzy around ERC-404 led to a surge in Ethereum gas prices to an eight-month high.