Pandora launches ERC-404 v2, transfer gas fee is expected to drop by 50%

In February of this year, the Pandora team unveiled an experimental token standard, ERC-404, that has quickly caught the attention of the crypto community. ERC-404 seeks to bridge the best of both worlds by combining the characteristics of ERC-20 and ERC-721 standards, thereby leveraging the advantages of fungibility and uniqueness in one framework. This innovative approach led to a flurry of excitement upon its launch, with several ERC-404 projects experiencing rapid value surges. However, this initial enthusiasm has somewhat cooled in recent times.

The high gas fees required for trading ERC-404 tokens and the high risk of Rug pulls

Despite its promising start, ERC-404 has not been without its challenges. A significant concern that has emerged revolves around the security of the token standard. The founder of the blockchain security company SlowMist, Yu Xian, has raised alarms over the potential risks during the trading process of ERC-404 tokens. Specifically, the associated NFTs could be at risk of being transferred or destroyed indiscriminately. Yu Xian's warning underscores that ERC-404, while innovative, still lacks the maturity of a standard devoid of security vulnerabilities, emphasizing that new mechanisms invariably introduce new risks.

Furthermore, the token standard has been criticized for the high gas fees required for transactions and the heightened risk of the 'Rug pulls'—a scam where developers abandon a project and run away with investors' funds. One notable case involved a speculative user who spent an astonishing $113,000 in Gas fees on a $26,000 worth ERC-404 token project, hoping for substantial returns, only to see the value plummet to zero within 35 minutes.

The upcoming release of ERC-404's latest version, V2, as teased by Pandora on social media

Despite these hurdles, the Pandora team has not been deterred. In a recent announcement, they teased the imminent release of ERC-404 V2, the latest version of the token standard. This update has been eagerly anticipated, promising significant improvements over its predecessor. The team has made the 'V2' version available to developers through the official GitHub, with a final audit by Trail of Bits underway.

Preliminary data shared by Pandora from tests run on the Ethereum development environment Hardhat shows promising enhancements. The gas cost for minting tokens in ERC-404 V2 is expected to decrease by approximately 28%, and the cost for transferring tokens could see a reduction of about 50%. However, the cost for destroying tokens is anticipated to increase by 80%, a change attributed to the reuse of token IDs and aligning with expectations.

ERC-404 V2.0 drops despite high expectations

Despite the optimism surrounding the release of ERC-404 V2.0, Pandora's price has recently been on a downward trajectory. Data from DEX Screener indicates a notable decline, with the price dropping nearly 50% from its historic high of $32,755 to $18,040, as of the latest reports. Additionally, sales total and transaction numbers for Pandora NFTs have also seen a decrease, with CryptoSlam data revealing a 14.86% reduction in sales volume over the past week.

Image Source: DEX Screener

The journey of ERC-404 illustrates the dynamic and often unpredictable nature of the cryptocurrency market. While the upcoming V2 version promises to address some of the critical challenges faced by its predecessor, the market response remains to be fully seen. As with any innovative technology, the balance between advancement and security remains a pivotal concern, underscoring the need for ongoing development and vigilance in the crypto space.

Image Source: CryptoSlam