Ethereum Gas Fees Soar While ERC-404 Token Gains Momentum

Ethereum Gas Fees Soar While ERC-404 Token Gains Momentum

Surging Gas Fees

The growing excitement about the new and unofficial experimental token standard ERC-404 has triggered the rise of gas fees on the Ethereum network. As a result, the network’s gas fees have reached their highest level in eight months due to the widespread interest in the ERC-404 token standard.

On February 9, Ethereum gas peaked at 70 gwei (or $60) for a primary crypto transaction. Recall that on May 12, 2023, gas fees during peak hours rose to 377 gwei, an amount never previously seen.

It is worth noting that the rise in gas costs is due to several factors, but increased enthusiasm for the ERC-404 token standard plays a significant role. Increased participation and interest in this experimental token standard contributed significantly to the growing demand for Ethereum network resources.

Given the recent spike in gas fees, it is clear that ERC-404 is gaining traction within the digital asset ecosystem. A higher willingness from users and investors to establish joint ventures with this unique token standard has resulted in network congestion and, as a result, an increase in transaction costs.

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The ERC-404 Token Debut

There was increased attention on the ERC-404 token following its launch on February 5 in collaboration with the Pandora project. In addition, the ERC-404 token has seen a remarkable surge in popularity since then, with a trading volume surpassing $474 million and expanding by 6,100%.

By design, ERC-404 should seamlessly incorporate ERC-20 tokens and ERC-721 nonfungible tokens (NFTs), which sets it apart from other cryptographic protocols. This novel approach enables the creation of fractionalized NFTs, an unprecedented concept that grants ownership of unique portions of a single NFT to multiple wallets through a collaborative effort.

All participants are allowed to employ their unique fractions as collateral for loans or trading, thus enhancing the liquidity and utility of the ecosystem.

Not Yet Official

While the term “ERC” implies a relationship to established token standards, it is worth noting that the ERC-404 coin is not official. On February 9, “ctrl,” a Pandora developer, said that the team is aggressively addressing the issue of high gas prices to “drastically reduce” these expenses.

Recognizing gas optimization’s critical role in boosting adoption and enabling protocol integration, the Pandora team hopes to achieve significant savings in gas fees. According to PopPunk, a pseudonymous user and co-founder of Gaslite, a gas auditing service, an ERC-404 token transaction consumes almost three times as much gas as an average NFT transaction.

This mismatch is the primary reason for the ongoing efforts to streamline and improve the efficiency of the ERC-404 standard, recognizing that cost-effectiveness plays a huge role in gaining broader acceptance. The spike in network traffic on February 9 was primarily due to increased activity on the decentralized exchange system Uniswap.

Meanwhile, analysts opine that the trigger for this increased utilization could be the trade volumes generated by popular ERC-404 projects such as Pandora and DeFrogs. According to Birdeye, a crypto aggregating platform, these initiatives contributed a cumulative trading volume of over $600 million to the network in the past week.

ETH currently trades at $2,486, down 1.56%, according to Coinmarketcap data. Nevertheless, analysts predict a bullish outlook for the leading altcoin this week.

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Cecil Felix
About Author

Cecil Felix

Cecil Felix, a vanguard in crypto journalism, provides incisive perspectives on the digital currency frontier. With a talent for distilling complex blockchain phenomena into digestible insights, Cecil's articles are a touchstone for enthusiasts and experts. His depth and clarity solidify his reputation as a leading crypto commentator

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