ERC-404 Sparks Ethereum Gas Fees to Skyrocket to Eight-Month High
Summary:
Surging interest in the experimental token standard, ERC-404, prompts Ethereum network gas fees to reach an eight-month high on February 9. Introduced by the Pandora project, the ERC-404 aims to merge ERC-721 NFTs with ERC-20 tokens, allowing fractional ownership of NFTs. Despite its sudden popularity leading to gas costs peaking at 377 gwei, the Pandora team is attempting to substantially reduce these costs.
Gas fees on the Ethereum network hit their loftiest in eight months, spurred by the growing fascination around an innovative yet unofficial token standard known as ERC-404. On February 9, the average Ethereum network gas prices climbed to 70 gwei, equivalent to $60 per standard transaction, with peak gas costs catapulting to an unprecedented 377 gwei - a height not attained since May 12, 2023. This sudden gas price elevation seemed to coincide with the increasing popularity of the ERC-404 token standard within the crypto realm. The phenomenon of ERC-404 started to make waves on February 5, when an initiative known as Pandora brought about this experimental standard. In a short span, it has witnessed a whopping 6,100% gain and over $474 million in trading volume. The ERC-404 token standard intends to merge ERC-721 NFTs with ERC-20 tokens, thereby enabling the fractionalization of NFTs. It allows varying wallets to possess a fraction of a single Nonfungible Token (NFT), and utilize that fraction for trading or loan collateral. The prefix "ERC" on this new token variant is unofficial, as clarified by a developer from Pandora, pseudonym "ctrl", in a chat with Cointelegraph. She added that her team is ardently working on minimizing gas costs, claiming a potential reduction of about 300-400% in some instances. Co-founder of gas-auditing company Gaslite, pseudonymous user PopPunk, underscores that an ERC 404 token consumes thrice as much gas as an average NFT transaction. Recent spikes in network usage on February 9 are majorly due to increased activity on the decentralized trading protocol, Uniswap. A significant portion of this activity traces back to trading volumes made by Pandora, DeFrogs, among others, contributing to a combined trading volume of more than $600 million in the past six days.
Published At
2/12/2024 10:04:22 AM
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