>>> What are 404s [ERC404]?
>>> How do they innovate on traditional NFTs [ERC721]?
>>> Why are they the future?🧵
https://x.com/spotlight404
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"ERC404 is an experimental, mixed ERC20 / ERC721 implementation with native liquidity and fractionalisation."
- @0xacme founder of @Pandora_ERC404 on Github
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>>> What are 404s [ERC404]?
ERC404 is a new contract standard which has recently gained traction due to the fact that it allows for projects to be simultaneously:
🪙 ERC20 token (importantly, with a with a liquidity pool)
🖼️ ERC721 token (NFT collection)
- BUY whole token
When you BUY 1 whole token, you will automatically receive an NFT from the collection.
- SELL whole token
When you SELL your token, your NFT will be sent out of your wallet and back into the liquidity pool.
- SELL fraction of a token
If you sell even a fraction of a token & you own less than 1 (even if 0.9999) your NFT will also be sent back to the pool.
>>> How do they innovate on traditional NFTs [ERC721]?
ERC404's innovation improves on traditional NFTs by a) solving the liquidity problem & b) fractional ownership of NFT projects.
a) the liquidity problem of NFTs:
The only way a holder can sell their NFT is to list it on a market place and wait for a buyer to buy it.
Spoiler: This may never happen.
ERC404 introduces an elegant solution to this problem. Since your NFT is linked to the token, you can sell your NFT at any time, simply by selling the token on a DEX.
You don't have to wait for a buyer, its a market (liquidity pool).🧠
If solving the liquidity problem was not enough...
b) fractional ownership in the project.
If you believe that the project is going to perform well but you can't afford to buy a whole token, with 404s you can purchase as little as you want from the project token and can still profit from the projects success.
ERC404s are great, BUT how do you know which NFT from the collection you'll receive if you purchase a whole token?
Visit http://spotlight404.com where we show you the NFT queue for your favourite @avaxprojects. With @spotlight404 you can collect your favourite pieces!
>>> Why are they the future?🧵
Why would you own an illiquid asset when you can hold a liquid one? We believe that traditional NFT projects will soon start converting (wrapping) into 404s to access liquidity. We also believe that all meme coins going forward will be 404s as well, but hey we are a little biased.
@0xacme might have created an asset which will outgrow traditional NFTs in the coming years & @spotlight404 is here to support the @avax movement.
