ERC-404 Token Standard

Definition ∞ The ERC-404 token standard represents an experimental, semi-fungible token specification that combines characteristics of both ERC-20 fungible tokens and ERC-721 non-fungible tokens. This innovative standard allows a single token to exhibit both divisible, interchangeable properties and unique, non-divisible attributes. It aims to bridge the liquidity gap often experienced by non-fungible assets by enabling fractional ownership and simplified trading. The ERC-404 standard facilitates new hybrid digital asset applications.
Context ∞ The ERC-404 token standard has generated considerable discussion within the digital asset community due to its novel approach to token design. It presents opportunities for enhanced liquidity for non-fungible assets and opens avenues for new decentralized finance applications. However, its experimental nature means it is not yet officially recognized by the Ethereum Foundation, leading to ongoing debate about its security and long-term viability. Observing its adoption and further development will clarify its ultimate impact on the ecosystem.