In the last 24 hours, the cryptocurrency market has experienced a major shakeup. Innovator ERC-404 Their tokens faced a sudden and drastic drop in market value. These experimental tokens, which were developed on the Ethereum blockchain and blended the features of ERC-20 and ERC-721 tokens, rapidly lost value in the market. The industry suffered a huge loss of $60 million, losing one-third of its total market value in just one day.
ERC-404: The Latest Fiasco of the Crypto World
Although ERC-404 tokens have not yet been formalized as the Ethereum Improvement Proposal (EIP) standard, they have attracted great interest even in their experimental phase. These tokens aimed to bring a new breath to the cryptocurrency market by combining the liquidity advantages of ERC-20 and the unique features of ERC-721. In particular, by making trading NFTs more accessible and affordable, this approach had the potential to attract new participants to the market.
Projects that draw attention with the use of ERC-404 include names such as PANDORA, DEFROG and RUG. PANDORA increased its value from $8,600 to $32,200 in a week, but was subsequently hit by a 24% decline. Similarly, DEFROG lost 26% and RUG lost 31%. These declines revealed the volatility and risks of ERC-404 tokens in the market.
These tokens are based on the idea of dividing assets into smaller, tradable units. ERC-404 specifically aims to open the NFT market to a wider audience of investors. This innovative approach has the potential to create new opportunities in the cryptocurrency world and attract a broad investor base.
Some projects have achieved significant success by adopting this new standard. For example, DEFROGS showed a huge gain in value in a short period of time, with one investor making $166,000 in gains in just two days. These success stories show that ERC-404 can make a significant impact on the crypto market.
However, the recent sharp decline also reveals the difficulties faced by this new token standard and the uncertainties in the market. While ERC-404 tokens continue to foster innovation and investor interest, they also present risks and opportunities for investors.
