Gas fees on the Ethereum network soared to an eight-month high amid heightened interest in a novel, unofficial token standard known as ERC-404.
On Feb. 9, Ethereum network gas prices peaked at an average of 70 gwei (equivalent to $60 for a standard transaction), reaching levels not seen since May 12, 2023. Peak gas costs skyrocketed to 377 gwei during this period.
The surge in gas prices coincided with increasing enthusiasm surrounding the ERC-404 token standard within the cryptocurrency community.
The ERC-404 frenzy was ignited on Feb. 5 when the Pandora project introduced this experimental standard. Since its launch, Pandora has experienced staggering growth, with over 6,100% increase in value and a trading volume exceeding $474 million.
ERC-404 aims to merge ERC-721 non-fungible tokens (NFTs) with ERC-20 tokens, enabling the creation of fractionalized NFTs. This allows multiple wallets to collectively own portions of a single NFT, which can then be traded or staked for loans.
Despite adopting the “ERC” prefix, ERC-404 remains an unofficial token standard. A developer from the Pandora project, identified by the pseudonym “ctrl,” disclosed plans to significantly reduce gas costs associated with ERC-404 transactions.
According to PopPunk, a co-founder of gas-auditing firm Gaslite, ERC-404 tokens consume approximately three times more gas than the average NFT transaction.
The surge in gas fees correlates with the substantial trading volumes generated by ERC-404 projects like Pandora and DeFrogs. Collectively, these projects recorded a trading volume exceeding $600 million in the past week, as per data from crypto aggregator Birdeye.
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