In response to the surge in network congestion triggered by the experimental ERC-404 standard, Ethereum developers have introduced a new token contract named DN-404, aimed at mitigating the drawbacks associated with ERC-404s.
DN-404, which stands for “Divisible NFT-404,” builds upon existing token standards ERC-20 and ERC-721, ensuring full compliance with these frameworks. While ERC-20 governs token issuance, ERC-721 is dedicated to non-fungible tokens (NFTs).
The exponential rise in popularity of ERC-404s has inadvertently contributed to increased network congestion and soaring fee rates on the Ethereum blockchain. Transactional fees, spurred by ERC-404 activity, have skyrocketed to eight-month highs, reaching as much as $840 for a single transaction, a stark contrast to the usual $50 cost.
Acknowledging the impact of ERC-404 contracts on gas fees, developers like @PopPunkOnChain have attributed the recent spike in gas fees to the growing utilization of ERC-404 contracts. Gas fees, essential for prioritizing transactions within Ethereum’s network, have surged, peaking at 360 gwei over the weekend, sparking concerns among market observers.
Although ERC-404 is not formally recognized by the Ethereum Foundation and is considered experimental, it has garnered significant attention from projects, collectively accumulating a $209 million market capitalization in just a few days. Despite criticisms from some Ethereum developers regarding its naming convention, ERC-404’s innovative features, such as enabling multiple wallets to own a single NFT directly, have piqued interest within the developer community.
While DN-404 and ERC-404 await official recognition, they remain freely usable within the Ethereum network. ERC-404 developers are actively working on an Ethereum Improvement Proposal (EIP) to establish the experimental token standard formally. Additionally, discussions are underway regarding the formation of a foundation to further develop the standard, foster adoption, and support the growing ecosystem of builders embracing this new technology.
The emergence of DN-404 underscores the Ethereum community’s proactive approach to addressing network challenges, ensuring continued innovation and resilience in the face of evolving demands.