💡What is an ERC-404

ERC-404 integrates components from the ERC-20 and ERC-721 standards, which are not conventionally intended to interact, in a novel manner. In contrast to conventional methods, its ERC-721 approach utilizes token fires and mints to facilitate fractional transfers.

The GitHub page for the standard states, "This aspect of the concept's design is intentional, with the intention of creating an NFT that has native fractionalization, liquidity, and encourages certain aspects of trading/engagement to farm unique trait sets."

The rationale for this is that NFT fractionalization protocols have been observed, in which an NFT can be locked and shares effectively issued against it. On the other hand, ERC-404 is specifically engineered to incorporate fractionalization internally into NFT initiatives that adhere to the standard. This presents novel opportunities for NFT trading and experimentation.

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