ERC-404

Intermediate
Жаңыртылган Sep 15, 2026

What Is ERC-404?

ERC-404 is an experimental Ethereum token standard that combines properties of ERC-20 fungible tokens and ERC-721 non-fungible tokens to create semi-fungible assets with fractional ownership.

While ERC-20 tokens are entirely interchangeable and ERC-721 tokens are individually unique, ERC-404 occupies a middle ground. It allows a single digital asset to function both as a tradable token and as a unique collectible, potentially improving liquidity for assets that would otherwise be difficult to trade fractionally.

How ERC-404 Tokens Work

Semi-fungible nature

ERC-404 tokens are described as "semi-fungible" because they can switch between fungible and non-fungible states. Unlike traditional tokens that are either fully interchangeable or completely unique, ERC-404 tokens blend both properties. This makes digital assets more versatile.

Mint-and-burn mechanism

At its core, ERC-404 uses a mint-and-burn mechanism that facilitates fractional ownership and transfer of non-fungible tokens (NFTs). When a user acquires enough units of an ERC-404 token, the protocol automatically mints a corresponding NFT. Conversely, when units are sold below a threshold, the NFT is burned. This allows NFTs to be divided into smaller, tradable pieces.

Replicant NFTs

The first project to implement ERC-404, Pandora, introduced a "replicant NFT" concept. For each PANDORA token a user holds, they receive a corresponding NFT from an associated collection. 

Source

This creates a link between the fungible token and a unique digital item, enabling continuous liquidity on decentralized exchanges while maintaining NFT collectibility.

Why ERC-404 Matters

ERC-404 addresses a longstanding challenge in the NFT market: liquidity. Standard NFTs typically trade through marketplace listings and auctions, which can be slow and dependent on individual buyers. By allowing fractional ownership through a token standards approach, ERC-404 tokens can be bought and sold on decentralized exchanges, enabling continuous market depth.
Currently, however, ERC-404 remains experimental and unofficial. It has not been submitted or accepted as a formal Ethereum Improvement Proposal (EIP), which means it lacks the scrutiny and security assurances of official ERC standards. 

Some wallets do not fully support ERC-404 tokens, and concerns about smart contract vulnerabilities persist. Developers continue to work on optimizing gas costs associated with the frequent minting and burning processes.

Learn more: What Are Token Standards?
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Токен стандарттары

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