When
I
first
started
seeing
references
to
ERC-404
tokens
on
social
media
early
this
week,
I
thought
it
was
a
funny
joke
—
a
non-existent
token
referencing
the
error
message
you
sometimes
see
while
surfing
the
web,
HTTP
404,
meaning
“page
not
found.”
When
I
learned
a
little
later
that
the
project
is
real,
I
thought
it
was
a
little
less
funny.
This
is
an
excerpt
from
The
Node
newsletter,
a
daily
roundup
of
the
most
pivotal
crypto
news
on
CoinDesk
and
beyond.
You
can
subscribe
to
get
the
full
newsletter
here.
The
problem
begins
and
ends
with
the
project’s
branding:
ERC
refers
to
“Ethereum
Request
for
Comments,”
the
set
of
technical
standards
used
to
launch
tokens
on
Ethereum.
It’s
a
failsafe
meant
to
ensure
new
token
standards
are
up
to
snuff
—
something
the
community
has
vetted
as
a
viable,
safe
and
useful
proposal.
As
written
on
the
Ethereum
GitHub:
“The
goal
of
ERCs
is
to
standardize
and
provide
high-quality
documentation
for
the
Ethereum
application
layer.”
Further,
“Before
you
write
an
ERC,
ideas
MUST
be
thoroughly
discussed
on
Ethereum
Magicians
or
Ethereum
Research.
Once
consensus
is
reached,
thoroughly
read
and
review
EIP-1,
which
describes
the
EIP/ERC
process.”
See
also:
Ethereum’s
Political
Philosophy
Explained
|
Opinion
ERC-404
did
away
with
all
of
that.
While
now
called
an
“unofficial”
and
experimental
token
architecture,
ERC-404
was
launched
into
the
world
by
a
four-person
team
without
any
documentation
or
buy-in
from
the
wider
community.
And
it’s
certainly
caused
a
controversy.
“It’s
not
really
the
ERC
that
people
have
an
issue
with,
so
much
as
the
cheapening
of
what
is
traditionally
seen
as
off-limits,
the
development
process
of
Ethereum
itself,”
Paul
Dylan-Ennis,
a
lecturer
and
assistant
professor
in
the
College
of
Business
at
the
University
College
Dublin
and
author
of
a
book
covering
Ethereum
governance,
said
in
a
direct
message.
Indeed,
the
core
idea
behind
ERC-404s
is
to
make
it
easier
to
fractionalize,
split
ownership
and
improve
liquidity
when
trading
non-fungible
tokens
(NFTs).
There
might
genuinely
be
something
to
the
idea.
ERC-404
combines
two
existing
token
standards,
ERC-20
and
ERC-721,
used
for
minting
regular
Ethereum-based
tokens
and
NFTs,
respectively,
in
a
bid
to
create
“semi-fungible”
tokens.
Ctrl,
one
of
ERC-404’s
pseudonymous
developers,
told
CoinDesk
they’re
now
working
to
submit
an
EIP,
or
Ethereum
Improvement
Proposal,
the
way
to
get
officially
recognized
by
the
Ethereum
Foundation.
He
mentioned
elsewhere
getting
an
approved
EIP
is
“one
of
the
more
bureaucratic
things
you
can
do.”
At
press
time,
however,
no
formal
proposal
has
been
submitted.
In
a
twist,
the
webpage
where
such
a
proposal
might
exist
—
https://eips.ethereum.org/EIPS/eip-404
—
turns
up
an
HTTP404
message.
It
might
be
too
little
too
late.
You
can
argue
that
ERC-404
was
released
in
the
spirit
of
permissionless
development,
one
of
the
features
and
strengths
of
building
on
blockchains.
The
whole
point
of
Ethereum,
aka
the
World
Computer,
is
that
people
can
build
and
release
without
running
it
by
a
gatekeeper.
But
in
a
sense,
by
picking
the
name
ERC-404,
it’s
an
act
of
stolen
valor.
This
attempt
to
legitimize
the
project
has
understandably
kicked
up
dust.
The
official
X/Twitter
account
for
a
key
piece
of
Ethereum
infrastructure,
@lightclients,
said
responding
to
one
of
the
project’s
developers,
who
has
since
deleted
their
X/Twitter
account:
“erc-404
doesn’t
exist,
stop
picking
a
random
number
out
of
thin
air.”
Laurence
Day,
a
well-known
jester,
developer
and
legal
commentator
in
Ethereum
circles
said:
“I’m
so
sorry
but
slapping
‘experimental’
on
an
ERC
to
subvert
the
fact
that
this
is
something
that
has
no
consensus
over
design,
break
events
in
weird
ways
and
is
showing
us
up
as
mercenary
shitcoiners
that
I
can’t
and
don’t
want
to
defend.”
Others
have
raised
concerns
over
the
safety
of
the
technical
design
of
ERC-404s,
considering
that
they
are
unaudited.
An
X
user,
@quit,
ran
an
experiment
and
found
that
a
wrongly
configured
protocol
could
be
easily
exploitable.
While
others
still
have
said
that
there’s
little
meat
to
the
project.
“It’s
just
a
remake
of
an
old
idea
that’s
been
tried
multiple
times,
but
with
a
twist
where
it
has
a
disingenuous
name,”
kaden.eth,
an
Ethereum
security
engineer
and
researcher,
said
in
a
direct
message.
The
first
such
ERC-404
token,
Pandora,
was
launched
on
Feb.
2
and
now
has
a
$188
million
market
cap.
The
way
it
works
could
help
explain
how
other
ERC-404s
are
supposed
to
function:
Every
time
someone
buys
a
Pandora
token
(released
with
an
initial
supply
of
10,000
tokens)
they
mint
a
corresponding
“Replicants”
NFT.
If
they
spend
a
fraction
of
their
token,
the
entire
NFT
is
destroyed.
However,
ERC-404
allows
people,
potentially
multiple
parties,
to
combine
fractions
of
Pandora
tokens
to
mint
a
new
NFTs
(the
replicants
series
has
different
levels
of
rarity
built
in,
so
the
replacement
NFT
could
theoretically
be
worth
more
or
less
than
the
original).
This
isn’t
the
only
way
to
mix
and
match
tokens
and
NFTs,
and
a
number
of
other
projects
have
launched
ERC-404
tokens
with
different
characteristics.
Whether
or
not
there
needs
to
be
a
new
way
to
fractionalize
NFTs,
it’s
clear
ERC-404s
have
caught
people’s
attention.
Prominent
exchanges
OKX
and
Binance
seem
to
think
the
non-standard
standard
has
legs,
and
have
announced
support
for
the
classification
—
helping
to
legitimize
the
effort.
None
of
this
is
meant
to
direct
ire
at
the
project
founders,
who
appear
to
have
legitimate
intentions.
There
is
nothing
wrong
with
identifying
a
problem,
and
coding
up
a
solution;
after
all,
crypto
is
supposed
to
be
a
world
without
gatekeepers.
And,
in
a
way,
it
is
a
clever
marketing
hack,
a
way
to
draw
attention
to
something
that
may
otherwise
have
gone
unnoticed.
But
the
branding
itself
also
indirectly
signals
more
confidence
in
the
effort
than
it
deserves,
at
least
until
it
is
properly
vetted.
As
Dylan-Ennis
said:
“They
are
hoodwinking
people
into
believing
it’s
a
new
formal
standard.”
And
that’s
the
thing
about
open,
permissionless
protocols:
at
the
technical
level,
code
is
law.
But
Ethereum
also
has
a
culture,
and
sometimes
there
are
rules
to
follow.
:format(jpg)/cloudfront-us-east-1.images.arcpublishing.com/coindesk/VFNVLRR2YJFHVMJ5OBSOB5RVNI.png)
