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Ethereum Gas Costs Reach Eight-Month Peak Amid Surge in ERC-404 Token Activity

Gas fees on the Ethereum network have surged to levels reminiscent of March 2023, propelled by the increasing popularity of an experimental token standard referred to as ERC-404.

Ethereum

Photo by Nenad Novakobic on Unsplash


Ethereum Gas Fees Hit Peak Levels


On February 9th, Ethereum's gas fees spiked to an average peak of 69 gwei, reaching as high as 368 gwei for certain transactions – a level not seen since May 12th, 2023.


The surge in gas fees can be attributed to various factors, but the main driver is the growing interest in the ERC-404 token standard. This increased attention has led to a significant rise in trading activities, especially within projects like Pandora and DeFrogs.


These ERC-404 projects, along with others, have collectively generated more than $600 million in trading volume over the past week, as reported by crypto data aggregator Birdeye. Pandora, in particular, has experienced remarkable growth since its launch, with its value skyrocketing by over 6,300% and its trading volume exceeding $462 million.


The ERC-404 standard aims to connect ERC-721 non-fungible tokens (NFTs) with ERC-20 tokens, enabling the creation of fractionalized NFTs. This innovation allows multiple users to co-own a single NFT and utilize their ownership shares for trading or securing loans.


This informal decentralized framework aims to blend features from both sectors, enabling developers to create fractionalized NFT collections that users can exchange on open markets like Uniswap.


Although the standard is presently informal, indicating that it is not yet recognized by the Ethereum foundation, there are speculations about a proposal to formalize it, potentially unlocking additional functionalities like staking.


Despite its unofficial status, the standard has attracted considerable interest within the cryptocurrency community. The team behind Pandora is actively engaged in optimizing gas costs linked with ERC-404 transactions.

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