A few days ago, ERC-404 tokens exploded in popularity on the Ethereum blockchain. However, as quickly as the hype rose, the prices of these tokens have taken a nosedive, experiencing double-digit daily losses. 

The initial excitement surrounding the experimental ERC-404 token standard has waned, paralleled by a surge in Ethereum gas fees. The trend of ERC-404 tokens may have caused a spike in Ethereum gas fees, reminiscent of levels last seen in 2023. 

On February 9, the average transaction cost on the Ethereum network reached 70 gwei, equating to over $60. Peak costs soared to 377 gwei on the same day, drawing comparisons to the gas fee levels witnessed on May 12, 2023. 

The original token developed under the ERC-404 standard, named Pandora, achieved a peak market cap of $324 million on Feb. 9. However, its value has since been halved to $150 million, with each token now trading at less than $15,000. 

Pop Punk, an anonymous gas auditor on X, has pointed fingers at the ERC-404 standard for the exorbitant Ethereum gas prices, asserting that ERC-404 transfers are three times more costly than the normal ERC-721A.

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The Birth of ERC-404: A Blend of ERC-20 and NFTs

To understand the dynamics at play, it's essential to grasp the purpose of ERC-404. This token standard aims to enhance ERC-721 NFTs by binding them to ERC-20, resulting in a divisible NFT (DN) that can be owned by multiple wallets. 

Each wallet can trade or stake its fractional ownership for loans, resembling fractional shares or stocks in traditional finance. ERC-404 represents a unique fusion of ERC-20 tokens and NFTs, essentially introducing native fractionalization to the world of NFTs.

Despite its innovative approach, ERC-404 has faced criticism, particularly regarding transaction fees. The burning and re-minting of NFTs on the Ethereum mainnet are deemed expensive, contributing to the perceived inefficiency of the ERC-404 implementation. 

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Enter DN-404: A Rival Implementation Emerges

In response to the drawbacks of ERC-404, a group of developers is on the verge of releasing an alternative implementation known as Divisible NFT, abbreviated as DN-404. Cygaar, a pseudonymous developer, announced the imminent release, emphasizing the team's dedication to crafting efficient and improved code.

As per reports, there have, however, been tensions between the Pandora team, the creators of ERC-404, and the developers behind DN-404.

As the crypto community waits for more information, one question remains: Is DN-404 better than ERC-404? A battle for token supremacy is raging, and only time will tell which will prevail.