Pandora has witnessed a remarkable surge of over 30% in the last 24 hours amid a broader market resurgence.
The ERC-404 Token Standard
Based on data from CoinGecko, the Pandora token peaked at $32,427 today, marking a 35% increase in the past 24 hours. Its current trading price is $29,847, with a market capitalization of $306 million.
Created by pseudonymous developers known as “ctrl” and “Acme” under a project called Pandora, ERC-404 is an innovative token standard developed on the Ethereum blockchain, aiming to merge the functionalities of both ERC-20 (fungible tokens) and ERC-721 (non-fungible tokens or NFTs) standards. This integration allows ERC-404 tokens to possess characteristics of both types.
As stated on GitHub, “While these two standards are not designed to be mixed, this implementation strives to do so in as robust a manner as possible while minimizing tradeoffs.”
Pandora, the pioneering project behind the ERC-404 token standard, offers 10,000 ERC-20 tokens alongside 10,000 associated “Replicant” NFTs. One Replicant NFT is generated in the buyer’s wallet when purchasing a complete Pandora token on an exchange.
Meanwhile, selling a Pandora token results in the associated NFT being removed or “burned” from the user’s possession. This mechanism creates a symbiotic relationship between the fungible and non-fungible aspects of the token ecosystem within the Pandora project.
Despite its potential, Pandora emphasizes that the ERC-404 standard is “entirely experimental and unaudited” despite having undergone some preliminary testing. However, the project reassures the community that an independent audit is underway to bolster its reliability and security.
Community Skepticism and Concerns
There is still some skepticism in the community as doubts regarding the project’s specifics persist, with some even questioning the necessity of ERC-404’s existence. Recent discussions, including a February 8th post by a developer identified as “quit,” have raised concerns about potential vulnerabilities within ERC-404-based NFTs.
9/ You might be able to guess what happens.
This is a valid withdrawal amount, because the depositor has a balance much higher than the request.
However, Pandora interprets it as an ERC721 transfer, and thus our token depositor is able to steal the NFT from our NFT depositor. pic.twitter.com/sQwn9828Jp
— quit (👀,🦄) (@0xQuit) February 8, 2024
The post suggested that NFTs using the ERC-404 standard could be susceptible to theft if deposited into lending protocols not properly configured for ERC-404, highlighting potential security risks.
Number 2 on a seemingly endless list of airdrops for Pandora holders is @FroggyFriendNFT 🐸
Excited to see more established ERC721 collections build with ERC404. 2% of the collection will be airdropped to our holders 🤍 https://t.co/0wis2j8P2M
— Pandora (@Pandora_ERC404) February 7, 2024
Despite these challenges, the ERC-404 standard has sparked interest across various crypto communities. Several collections have begun experimenting with the new standard, including a frog-themed version of the DeGods NFT collection and a collection of ERC-404-based NFT pet rocks.