BitStarz Casino Review – Why Players Love It in 2025

ERC, or Ethereum Request for Comment, is used to define how different tokens behave on the network. They can be seen as a collection of rulebooks explaining tokens’ behavior, interaction, and reaction to wallets, apps, and even exchanges.

You’ve probably heard of ERC-20 or ERC-271 and how they impacted the network. ERC-20 is the standard for fungible tokens, while ERC-271 serves the same purpose for non-fungible tokens (NFTs). ERC-404 was introduced in early 2024 as an experimental standard. It creates a hybrid token that behaves like an ERC-20 and like an ERC-721 at the same time, bringing about a new type of asset that is exchangeable and linked to a particular value. 

In this article, we will talk about the ERC-404 standard, how it works, what is unique about it, and whether it can become something bigger.

What is ERC-404? 

ERC-404 is an unofficial Ethereum token standard that blends many features of ERC-20 and ERC-721. It was designed to support semi-fungible tokens: partially fungible assets that are still tied to a unique NFT. 

This standard is supposed to allow traders to swap tokens like regular ERC-20s, while still being linked to NFTs. When the trader has enough tokens, they can assemble them to mint a corresponding NFT. But if these tokens are split up, the NFT is then burned. 

Who Created ERC-404?

Two anonymous developers, known as “ctrl” and “Acme,” created ERC-404 as an experiment that has no official ties with Ethereum. At first, it was used on Pandora to test the idea of linking regular tokens to NFTs using a smart contract. 

Fast-forward to now, and ERC-404 is still not part of Ethereum’s official standards. This means that the standard hasn’t officially gone through the formal review process. But it gained a lot of attention because it introduced a new way to interact with the blockchain.   

How Does ERC-404 Work?

Using smart contract logic, ERC-404 mixes fungible tokens and NFTs by linking regular tokens to unique NFTs. This method allows users to own, trade, and even rebuild NFTs by holding or splitting the tokens. This entire system heavily relies on a mint-and-burn mechanism while supporting fractional ownership.

Mint-and-Burn Mechanism

When you hold a unit of ERC-404 tokens, the smart contract automatically creates an NFT for you. This process is called “minting”. If you send or sell part of that token, the NFT is then destroyed or “burned”.

This method allows NFTs to stay tied to full token ownership, meaning that you can either own the whole thing and get the NFT, or you don’t, and the NFT disappears. You don’t have to worry if this process seems complex, as the contract handles it all.  

Fractional Ownership

What’s special about ERC-404 tokens is that they are divisible, meaning multiple people can own parts of a single NFT simultaneously. These fractions can be traded on exchanges just like any ERC-20 token. 

Let’s imagine a scenario where someone had all fractions of an NFT, and they traded a part of it, they would lose ownership of the NFT. But if they had collected enough of the token to reach the full amount again, they get the NFT back. This process makes NFTs’ ownership shiftable as the tokens move between different wallet owners. 

ERC-404 vs ERC-20 and ERC-721

Comparing ERC-404 tokens with ERC-20 and ERC-721 tokens brings out various differences in type, uniqueness, divisibility, and other qualities.

What is ERC-404 Used For?

The ERC-404 standard can be used in different places where ownership, trading, and uniqueness matter. Combining NFTs and tokens opens new ways for people to manage their assets when, in the past, it was either too expensive, too hard to trade, or sometimes both. 

Let’s discover some instances where ERC-404 can be used. 

Digital Art and Collectibles

ERC-404 makes it possible to buy a piece of a high-value NFT instead of saving up and paying for the whole thing. It allows people to gain access to rare digital art or collectibles even when their resources are limited. You don’t need to have thousands of dollars in advance to own a part of an NFT. 

Real Estate Tokenization

Thanks to ERC-404, you can divide a real-world property into much smaller shares that can be traded just like regular tokens. Consider it a way to make real estate investments with much more flexibility and openness. 

Gaming and Metaverse

If you like gaming and the metaverse, then you can use the ERC-404 standard to own fractions of items or lands easily. You can share ownership of rare items while still being able to trade them in games or metaverse platforms.  

Decentralized Finance (DeFi)

ERC-404 tokens can also be used in DeFi as collateral or even staked for rewards. You can also add them to liquidity pools. This way, NFT-based assets are brought into DeFi tools when originally, this was possible with only fungible tokens.  

Event Ticketing

Another area where this standard can be used is in event tickets, which can be minted as ERC-404 tokens. This makes it harder for tickets to be faked or tampered with while still allowing for easy trading. You can even share the cost of a VIP ticket with a friend by owning fractions. 

Advantages of ERC-404

Since ERC-404 is a new innovation, it comes with great benefits that combine the strength of fungible tokens with NFTs. Let’s break them down: 

Enhanced Liquidity

You can’t trade traditional NFTs easily, as you would need a buyer who wants to pay full price, and that can take quite some time. ERC-404 changes this because the tokens are fungible and tradeable on DEXs. So you can sell part of your ownership instantly as the standard turns the NFTs into more liquid assets, just like regulated tokens.  

This also helps with price discovery as ERC-404 tokens are traded in real-time. It’s easier to see what the market thinks they’re worth right there and then, even if no one’s buying or selling the full NFT.

Accessibility

Usually, high-value NFTs cost a lot of money and ERC-404 lowers the entry barrier. You don’t need to buy the entire NFT, you can buy a small share, easily. This makes investing in premium digital art, collectibles, and even real estate much more affordable. 

This fraction ownership model also allows you to to join new communities shared around assets, which might be useful in things like group investing or group-based projects.

Versatility

There are many use cases for ERC-404, from DeFi to digital art to gaming. You can even use it for real-world assets (RWA) or ticketing. So, you don’t need to choose between ERC-20 or ERC-721 since you get the best of both worlds with ERC-404. 

It also creates new use cases that weren’t very possible before, like earning DeFi rewards from NFT-linked tokens or building apps where people can co-own and even manage their assets. 

ERC-404 Challenges

While this standard offers great advantages, it’s still experimental and comes with some risks that are worth knowing about.

Not Formally Recognized as an ERC Standard

As we mentioned before, this standard is not an official Ethereum standard, meaning it hasn’t gone through the Ethereum Improvement Proposal (EIP) process. 

Without standardization, there’s no way to know if other platforms will support it. Wallets, exchanges, and some tools might not treat it the same way as ERC-20 or ERC-271 tokens. This hiccup limits adoption and could lead to unexpected issues in the token’s behaviour. 

Technically Complex

The logic behind ERC-404 is much more advanced than regular token standards as it mixes two systems and adds extra rules for minting and burning NFTs. 

This makes the contracts much harder to write, test, and audit. A tiny mistake can cause major problems, like breaking the link between tokens and NFTs or accidentally burning assets. 

The Issue of Fractional Ownership

While fractionalizing NFTs sounds like a simple concept, it raises a lot of legal questions. If many people own parts of the same asset, how is it regulated? This could be a major problem in some countries. It could even count as a form of securities trading. 

It’s still unclear how regulators will treat these tokens. Until that’s figured out, projects using ERC-404 may face some compliance risks, especially if they involve RWAs like real estate or even tickets. 

Notable ERC-404 Projects

There are several projects out there that are already using the ERC-404 standard to explore new ways of trading and owning NFTs. Here are the most well-known so far: 

Pandora (PANDORA)

Launched in early 2024, Pandora was the very first project to use the ERC-404 standard. It paired 10,000 PANDORA tokens with 10,000 unique NFTs called Replicants. 

BitStarz Casino Review – Why Players Love It in 2025

(PANDORA)

$885.23

24h change + 3.15%

Pandora (PANDORA)

$885.23 (+3.1%)

---

24h Range

$855.11 ― $893.29

Market Cap: $8,849,679

Trading Volume: $1,739,422

All Time High: $32,494.00 (-97.3%)

If you held a full token, you got an NFT. If you sold part of it, the NFT was burned. When someone else collected a full token again, a new Replicant was minted. This mint-and-burn cycle helped show how ERC-404 works in practice.  

DeFrogs (DEFROGS)

DeFrogs is a collection of 10,000 frog-themed NFTs that use ERC-404. Instead of trading the NFTs directly, you can trade DEFROGS tokens that represent fractional ownership. This makes the NFTs more liquid and much easier to access for those who want small investments.  

BitStarz Casino Review – Why Players Love It in 2025

(DEFROGS)

$69.11

24h change + 5.73%

DeFrogs (DEFROGS)

$69.11 (+5.7%)

---

24h Range

$65.08 ― $69.95

Market Cap: $691,141

Trading Volume: $1,135

All Time High: $3,930.55 (-98.2%)

Monkees (MONKEES)

Monkees is a profile picture collection (PFP) that uses ERC-404 to improve NFT trading. It gives users more flexibility by letting them buy, sell, or even hold fractional pieces without needing to go through traditional NFT marketplaces. 

Rugged Art (RUG)

Next, we have Rugged Art. It’s a pixel-style NFT collection inspired by Solana’s Flippies. It uses ERC-404 to explore cross-chain compatibility and shared ownership. The project’s goal is to connect different NFT ecosystems while using Ethereum as its base.  

Will ERC-404 Become An Official Token Standard?

Right now, ERC-404 is not an official standard. It hasn’t gone through the EIP process, which is how new standards get approved. 

But its innovations have drawn considerable attention and interest. Devs are experimenting with it, and some NFT and DeFi projects are testing its features. Some people believe that it fills a real gap between fungible tokens and NFTs. 

For it to become official, the creators or the community need to submit a formal proposal. This process includes technical reviews, testing, and feedback from Ethereum core developers. If it passes all of that, it could become a recognized standard. 

Getting approved would make ERC-404 more secure, easier to adopt, and more likely to be supported by wallets and exchanges. 

ERC-404 Tokens FAQs