In a move to address the limitations of ERC-404, developers introduce DN404, a divisible NFT standard promising improved efficiency and compliance.
How DN404 Works: Exploring the Innovative Approach
DN404 operates based on a ‘base’ ERC-20 paired with a ‘mirror’ ERC-721, providing seamless interaction and compliance within existing protocols.
In response to the recent launch of ERC-404, a new experimental hybrid token and NFT standard called DN404 has emerged, aiming to revolutionize the way fractionalized NFTs are traded and managed. Developers behind DN404 claim to have tackled the inefficiencies and potential vulnerabilities of ERC-404, offering a more robust solution for creating and trading fractionalized NFTs.
DN404 stands out by employing a two-contract approach, leveraging both ERC-20 and ERC-721 standards to facilitate seamless trading and ensure compliance with existing protocols.
According to the pseudonymous developer “cygaar,” DN404 provides a more user-friendly and secure framework for fractionalizing NFTs, allowing users to trade portions of NFTs without intermediaries and across various exchange platforms.
The premise of ERC404 was to create a single contract that can act as both a fungible and non-fungible token.
However, this can't be done without introducing exploits and breaking standards.
Our approach instead uses two contracts – a "base" ERC20 with a "mirror" ERC721.
— cygaar (@0xCygaar) February 12, 2024
However, users are cautioned that DN404’s code has not undergone formal auditing, emphasizing the importance of exercising caution when utilizing the standard.
Also Read: A Guide to Creating an ERC-20 Token Without Coding
Safety Concerns: Evaluating the Risks and Responses
Amid the emergence of DN404, concerns over the safety of ERC-404 have been raised, highlighting potential vulnerabilities that could jeopardize NFT assets.
While ERC-404 developer “ctrl” dismisses these concerns as resulting from improper contract usage, the debate underscores the importance of thorough auditing and protocol integration in ensuring the security of NFT standards.
8/ Now, remember how Pandora uses the max token ID to determine what kind of transfer to execute.
Also remember that depositor 2 has 1*10^18 tokens to available to withdraw.
Let's withdraw some of those tokens. Not all, but just a small fraction…like maybe 38,916 of them. pic.twitter.com/iffHJEDyS0
— Quit (@0xQuit) February 8, 2024
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