- ERC-404 sector sees a 26% market capitalization decline in 24 hours.
- Ethereum gas fees surge to eight-month high amid ERC-404 frenzy.
In the fast-paced world of cryptocurrency, the Ethereum network has witnessed a tumultuous 24 hours marked by soaring gas fees and a sharp decline in the ERC-404 sector. According to data from Coingecko, the overall market capitalization of ERC-404 tokens has plummeted by a staggering 26%, leaving investors reeling from the sudden downturn.
Key players in the ERC-404 sector, including Pandora (PANDORA), DeFrogs (DEFROG), and Rug (RUG), have all experienced significant price declines within the past day. Pandora, the trailblazer in launching the experimental ERC-404 standard, saw its price tumble by 21.7% to $16,233.21, while DeFrogs and Rug experienced declines of 24.7% and 24.5%, respectively.
The ERC-404 frenzy, sparked by Pandora’s launch of the experimental token standard on Feb. 5, has captured the attention of traders and investors alike. It aims to revolutionize the interaction between ERC-721 nonfungible tokens (NFTs) and ERC-20 tokens, allowing for fractionalized ownership of NFTs and facilitating trading and staking functionalities.
Gas Fees Up, ERC-404 Down
However, the excitement surrounding ERC-404 has coincided with a surge in Ethereum network gas fees, reaching levels not seen since March 2023. Gas prices peaked at an average of 70 Gwei ($60 for a standard transaction) on Feb. 9, with peak costs skyrocketing to 377 Gwei. This spike in gas fees can be attributed to the heightened activity on decentralized exchange protocols like Uniswap, fueled by trading volumes generated by ERC-404 projects.
Despite the promise of ERC-404, concerns loom over its impact on gas costs. According to Gaslite co-founder PopPunk, a token consumes approximately three times the gas required for an average NFT transaction, posing challenges for widespread adoption.
As the Ethereum network navigates through this period of volatility, all eyes remain on the newbie ERC-40 tokens. Moreover, with gas fees soaring and market capitalization plummeting, investors brace themselves for further developments in this rapidly evolving sector.
