With the rapid development of blockchain technology today, innovation never stops. Following the advent of the ERC-404 standard, a new standard called BC-404 emerged, bringing new possibilities to the NFT market. BC-404 (BondingCurve404) — The first deflationary NFT contract in cryptocurrency based on improvements to ERC-404. This article will take an in-depth look at the BC-404 standard, which incorporates the advantages of ERC-404 and innovates it. ERC-404 protocol standard: Looking back on the past six months, ERC-404 is one of the most exciting innovations in the field of asset issuance in the Ethereum ecosystem. ERC-404 is an experimental token standard open sourced by the Pandora team for creators and developers in early February. It is a hybrid ERC-20/ERC-721 implementation and has the characteristics of native liquidity and fragmentation. This is achieved through the quantity correspondence logic between FT and NFT, that is, the "minting and destruction" mechanism of NFT. In layman's terms, the prices of some blue-chip NFT projects, especially those with rare attributes, are so high that they become priceless and difficult to circulate. Then the proposal of ERC-404 is a major improvement for these NFT projects that originally lacked liquidity. These high-priced NFTs can be split and traded in some mainstream trading markets, and are as convenient as purchasing token assets such as BTC and ETH. Fast.
BC-404 Token Standard: Initially ColorProtocol launched Memecoin’s ERC-404 conversion platform, Meme artists and communities can create their MemeNFT collections in ERC-404, and holders can convert their Memecoin into NFTs . Combined with the BondingCurve model, COLOR proposed the BC-404 standard based on ERC-404. It is stipulated that the number of tokens required to generate NFT will continue to increase until a preset upper limit is reached. Therefore, early entrants will have a cost advantage. In the ERC-404 contract, there is a fixed ratio between Token and NFT. The contract deployer can initially define "how many ERC-404Tokens an address needs to hold to generate an ERC-404NFT". For example, 1 $PandoraToken can generate 1 PandoraNFT. , but if your address only holds 0.9 $Pandora, PandoraNFT cannot be generated. BC-404 integrates the BondingCurve model, changing the number of BC-404 tokens required to generate BC-404NFT from a fixed amount to an increasing amount. This value will continue to rise with each new BC-404NFT generated, meaning each new NFT will be more difficult to generate than the previous one. When deploying the BC-404 contract, the deployer can set the initial difficulty of generating the first BC-404NFT (that is, how many BC-404Tokens an address needs to hold) and the incremental value of the difficulty of generating each subsequent BC-404NFT.
1. BC-404 standard bonding curve model: Generally speaking, BC-404 can be designed using three different difficulty models. Color defines the NFT generation difficulty as "BCCount": linear increase, acceleration slope curve As the value increases, the curve rises and the slope gradually decreases.
2. The token content of BC-404NFT: Since the number of BC-404 tokens required to generate each BC-404NFT is different, the token content of different NFTs is also different, that is, different numbers of tokens are held. Corresponds to the number of NFT generated. Instead, each ERC-404NFT carries the same fixed number of tokens. 3. BC-404NFT number: Due to differences in token content between BC-404NFT, their values are also different. To reflect this feature in the NFT market, the BC-404 contract links the NFTID to the NFT’s token content (the BC count at the time of generation): for example, when a user purchases a BC-404NFT with ID #1868, they are linked to Together, the NFT received 1,868 BC-404 tokens. Holders and traders can clearly determine the token content of each NFT through its ID in the wallet or NFT marketplace. The NFTID does not have to start at #1 and can rely on the initial BC count value set by the BC-404 contract deployer. NFTIDs do not need to be consecutive and can rely on the BC count increment pattern set by the deployer. Each NFTID is unique, and one NFT generated will always face a higher BC count than any previous one, giving each BC-404NFT its unique history. 4. NFT destruction mechanism and deflation: BC-404NFT transaction and transfer: Similar to ERC-404, NFT will remain unchanged when transferred, and the same amount of tokens will be transferred with the NFT. BC-404 token transactions and transfers: The destruction of BC-404NFT is likely to be triggered, depending on whether the remaining tokens are sufficient to support the NFT held after the transfer, similar to ERC-404V1. Any BC-404NFTID will only appear once. Once destroyed, the ID is non-renewable; therefore, the destruction of BC-404NFT means the shrinkage of the BC-404NFT collection, assuming that the contract sets a fixed total token supply. This makes BC-404 the first deflationary NFT contract in cryptocurrency.
Colorpepe: $colorpepe is the first BC-404 asset, and the first pepePFP series is generated from $PEPE and deployed on Base. It combines the uniqueness and scarcity of NFTs with the popularity and liquidity of Memecoin. The conversion pool allows users to convert $PEPE to the BC-404 standard (can be bridged across chains if necessary), giving local Memecoin assets NFT attributes. Conversion details: Free conversion: Just pay for gas, no additional costs. Reversible conversion: $colorpepe can be converted back to $PEPE at any time, and the corresponding amount of $colorpepe will be destroyed. Limited Supply: The total supply of $colorpepe tokens is limited and there is a time window for conversion. Whitelist priority: The conversion is divided into two phases. The first phase is limited to whitelist addresses, and the second phase is open to the public. ps: Make sure you have some $PEPE (ETH mainnet) in your wallet and enough $ETH to pay the gas fee.
Features of BC-404: 1. Decentralized value consensus BC-404 gives NFT its inherent unique value through its multiple token contents. Different from traditional methods, BC-404 does not preset the rarity rules of NFT, but allows the market and community members to independently determine the aesthetic value of NFT. BC-404 only designs NFTs for numerical uniqueness (ID equal to token content, determined by code and generation history). This approach is more in line with the decentralized spirit of the blockchain and also provides more possibilities for NFT valuation. For the BC-404NFT series, issuance is just the beginning, and its final form will be shaped by the market and the community. 2. The scarcity of NFT increases. Under the new minting and burning mechanism, the scarcity of the BC-404NFT collection will increase simultaneously with the token transaction volume. The deflation mechanism of NFT offsets the fact that the token liquidity in Dex (AMM) is greater than that in the peer-to-peer order market. The issue of NFT liquidity maintains the trading vitality and profitability of the NFT market (the circulation of NFT will decrease, and it will become more difficult to obtain NFT through token purchases). 3. Improved reset mechanism Unlike the ERC-404 standard, where transferring tokens to reset an NFT only incurs gas fees (negligible in low-fee networks), transferring under BC-404 Tokens will face a higher BC count to generate new NFTs. This design effectively increases replacement costs and reduces the possibility of low-cost arbitrage, thereby helping to maintain the long-term healthy development of the NFT market. 4. Rich trading strategies BC-404 provides market participants with more strategic choices, increasing the fun and depth of trading. Investors need to weigh multiple factors when seeking to acquire more NFTs: (1) the market premium of existing NFTs and their token content (2) the token cost required to generate new NFTs (this cost will continue to increase) (3 ) The complex decision-making process of randomness in generating new NFTs not only adds to the interest of the market, but also prompts participants to think more deeply about and analyze market dynamics and make wise investment decisions.
Potential Challenges and Outlook Although BC-404 has brought many innovations, its complex mechanism may take some time for market participants to fully understand and accept it. How to effectively explain the advantages and operation methods of BC-404 to users will be a major challenge in the early stages of project promotion. Secondly, BC-404 balances the liquidity of tokens and NFTs through its unique mechanism, but how to maintain this balance and avoid extreme situations in actual operation will be a problem that requires continued attention. Conclusion BC-404 has introduced a new value dimension to the NFT market - token content, which will become an important measure of the value of a single NFT. Looking to the future, BC-404 not only brings new possibilities to the NFT market, but also provides a new dimension for the value evaluation of digital assets. Its emergence marks that NFT is developing in a more complex and diversified direction, integrating token economics, deflation mechanism and dynamic pricing model. As the technology matures and the market accepts it, we can expect to see more innovative applications based on BC-404, truly expanding the audience of the 404 ecosystem and allowing it to prosper.
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