April 19, 2024
Ethereum gas fees hit 8-month high amid ERC-404 craze
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Ethereum gas fees hit 8-month high amid ERC-404 craze

Ethereum network gas fees surged to an eight-month high amid the rising interest in an experimental token standard, ERC-404. The average peak gas price reached 70 gwei ($60 for a standard transaction) on Feb. 9, with peak gas costs spiking as high as 377 gwei, a level not seen since May 12, 2023.

The spike in gas fees coincided with increased attention around the ERC-404 token standard, driven by the launch of Pandora on Feb. 5. The Pandora project, which introduced the experimental standard, experienced remarkable growth, gaining over 6,100% with a trading volume surpassing $474 million. ERC-404 introduces a unique concept by binding ERC-721 non-fungible tokens (NFTs) to ERC-20 tokens.

This innovation enables fractionalized NFTs, allowing multiple wallets to own a portion of a single NFT, which can be traded, staked, or used for loans. Despite its unofficial status, the ERC-404 token standard gained momentum quickly. One of the developers behind the Pandora project, using the pseudonym “ctrl,” mentioned that the team is actively working on reducing gas costs associated with ERC-404 transactions.

“We’re trying to optimize for gas because that’s a big part of adoption and protocols wanting to integrate […] So in certain cases, we’re able to potentially reduce gas fees by like 300% to 400%.”

PopPunk, the co-founder of gas-auditing firm c, highlighted that an ERC-404 token consumes approximately three times the gas required for an average NFT transaction.

The surge in network activity on Feb. 9 was largely attributed to increased usage of the decentralized exchange protocol Uniswap.

Notably, a significant portion of this activity originated from ERC-404 projects like Pandora and DeFrogs, contributing to a combined trading volume exceeding $600 million in the past week, according to data from crypto aggregator Birdeye.

Image by WorldSpectrum from Pixabay

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