What is BC-404? Comprehensive interpretation of the latest deflationary NFT standards

What is BC-404? Comprehensive interpretation of the latest deflationary NFT standards! Today, with the rapid development of blockchain technology, 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 (Bonding Curve 404) — 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 combines the advantages of ERC-404 with innovations.

Today the editor of this website will share with you what is BC-404? A comprehensive explanation of the latest deflationary NFT standard has been introduced in detail. Friends who need it can take a look together!

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 in early February for creators and developers. It is a hybrid ERC-20/ERC-721 implementation with features such as 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.

To put it simply, some blue-chip NFT projects, especially those with rare attributes, are so expensive that they become marketable 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 Color Protocol launched Memecoin’s ERC-404 conversion platform. Meme artists and communities can create their Meme NFT collections in ERC-404, and holders can convert their Memecoin Convert to NFT.

Combined with the Bonding Curve model, COLOR proposed the BC-404 standard based on ERC-404. Specifies that the number of tokens required to generate an NFT will continue to increase until a preset cap is reached. Therefore, early entrants will have a cost advantage.

• In the ERC-404 contract, Token and NFT are in a fixed ratio. The contract deployer can initially define "how many ERC-404 Tokens an address needs to hold to generate an ERC-404 NFT", such as 1 $ Pandora Token can generate 1 Pandora NFT, but if your address only holds 0.9 $Pandora, you cannot generate Pandora NFT.

• BC-404 integrates the Bonding Curve model, changing the number of BC-404 tokens required to generate BC-404 NFTs from a fixed amount to an increasing amount. This value will continue to rise with each new BC-404 NFT 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-404 NFT (that is, how many BC-404 Tokens an address needs to hold) and the difficulty of generating each subsequent BC-404NFT. Incremental value for difficulty.

1. BC-404 standard bonding curve model:

In general, BC-404 can be designed using three different difficulty models. Color defines the NFT generation difficulty as "BC Count" : Linear increase, acceleration slope curve increases, the curve rises, and the slope gradually decreases.

2. Token content of BC-404 NFT:

Since the number of BC-404 tokens required to generate each BC-404 NFT is different, the token content of different NFTs is also different, that is, holding Different amounts of tokens correspond to the amount of NFT generated. Instead, each ERC-404 NFT carries the same fixed number of tokens.

3. BC-404 NFT number:

Due to the differences in token content between BC-404 NFTs, their values ​​also vary. To reflect this feature in the NFT market, the BC-404 contract links the NFT ID to the NFT's token content (the BC count at the time of generation):

• For example, when a user purchases BC-404 with ID #1868 NFT, they will receive 1868 BC-404 tokens along with the NFT.

• Holders and traders can clearly identify the token content of each NFT via its ID in the wallet or NFT marketplace.

• NFT ID does not have to start at #1 and can rely on the initial BC count value set by the BC-404 contract deployer.

• NFT IDs do not need to be consecutive and can rely on the BC count increment pattern set by the deployer.

• Each NFT ID is unique, and one NFT generated will always face a higher BC count than any previous one, giving each BC-404 NFT its unique history.

4. NFT destruction mechanism and deflation:

• BC-404 NFT transactions and transfers: Similar to ERC-404, NFT will remain unchanged when transferred, and the same amount of tokens will accompany the NFT transfer.

• BC-404 Token Transactions and Transfers: It is possible to trigger the burning of BC-404 NFTs, depending on whether the remaining tokens are sufficient to support the NFT held after the transfer, similar to ERC-404 V1.

• Any BC-404 NFT ID will only appear once. Once destroyed, the ID is non-renewable; therefore, the destruction of BC-404 NFT means the shrinkage of the BC-404 NFT collection, assuming 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 pepe PFP series generated from $PEPE, 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 (with cross-chain bridging if necessary), giving local Memecoin assets NFT attributes.

Conversion details:

• Free conversion: Just pay gas, no additional cost.

• 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 cover gas fees.

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 is only designed for numerical uniqueness of NFTs (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 the valuation of NFTs. For the BC-404 NFT series, the issuance is just the beginning, and its final shape will be shaped by the market and the community.

2. Increased NFT scarcity

Under the new minting and burning mechanism, the scarcity of the BC-404 NFT collection will increase simultaneously with the token transaction volume, and the deflation mechanism of NFT offsets the token liquidity in Dex (AMM) Greater than the problem of NFT liquidity in the peer-to-peer order market, it 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), in BC When transferring tokens under -404, you 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 versus their token content (2) the cost of tokens required to generate new NFTs (this cost will continue to increase) (3 ) The randomness of generating new NFTs

This complex decision-making process 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 introduces 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 assessment of digital assets. Its emergence signals that NFT is developing in a more complex and diversified direction, integrating token economics, deflation mechanisms and dynamic pricing models. 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 thrive.

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