DN-404 is a experimental Ethereum Token standard that addresses the shortcomings of ERC-404 by improving tokenized assets efficiency, scaleability and interoperability.
DN-404The short form of “Divisible NFT-404,” The ERC-404 Standard was improved by Blockchain engineers and experts in the industry. ERC 404 aimed for integration of ERC-20 fungible tokens and ERC-721 Non-Fixable Tokens (NFTs) to allow fractionalization. ERC 404, however, faced significant problems, including higher Ethereum transaction fees, and limited scalability. This hindered ERC 404’s practical application.
DN-404 uses smart contracts and innovative consensus protocols to improve scalability in decentralized networks. This is done by reducing transaction costs and improving the throughput of transactions. The standard includes robust governance mechanisms that allow token holders the opportunity to be involved in decisions, including protocol upgrades, parameter adjustment, and voting for key proposals. Unlike ERC-404 which is primarily confined only to Ethereum, DN-404 allows seamless interoperability between multiple blockchain networks. This allows frictionless transfers of assets and transactions across chains.
DN-404 places a high priority on security and transparency, ensuring integrity and reliability through cryptographic and auditing mechanisms. The standard also includes standardized parameters for tokenomics, which simplifies the creation and management of tokens and ensures consistency across applications.
Technically speaking, DN-404 consists of two separate contracts. One is a ERC-20 base token while the other one is a mirrored ERC-721. The bifurcated method allows the management of both non-fungible and fungible assets. The majority of trading is done on the ERC-20 base tokens, which represent fractions from the NFTs. Users who accumulate enough base tokens will automatically be rewarded with a NFT represented by an ERC-721 mirror token.
The introduction of DN-404 opens up a variety of possibilities in DeFi, Digital Asset Management, and Blockchain-based Applications. Use cases could include tokenizing different assets for liquidity on decentralized markets, tokenizing real assets to provide fractional ownership or enhanced liquidity as well as cross-chain transactions that enable frictionless transfers of assets between blockchain networks.
Bonsai TokenBONSAI) is an exemplary implementation of the DN-404 standard, designed to function within the Lens Protocol ecosystem. DN-404 is a hybrid ERC-20/ERC-721 that allows fractionalizing NFTs. This allows BONSAI tokens to be used both as a fungible and a method to acquire NFTs. One BONSAI NFT can be created by converting 100,000 BONSAI Tokens. This allows for seamless integration between DeFi and social interaction on the Lens Platform. The innovative technology allows content creators to monetize The following are some examples of how to get started: work Set it up as a collectible on BONSAI. Users can then flip, swap and exchange directly in their social feeds. Bonsai Tokens also support community engagement via airdrops, rewards and other incentives. This further enhances its utility and acceptance within the decentralized eco-system.
Despite its many advantages, DN-404 remains experimental. It has not been subjected to formal auditing. The inherent risks associated with untested blockchain technologies are a warning to potential adopters. The DN-404 standard also addresses high transaction costs, inefficiencies, and other issues with ERC-404. However, its viability will be dependent on community support and continued refinement.
DN-404 offers a much more versatile and efficient framework than ERC-404, which was its predecessor. DN-404, by resolving the shortcomings of ERC-404 while introducing new features has the ability to revolutionize tokenized asset management within decentralized systems.
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Source: cryptoslate.com