Injective, a prominent Layer 1 blockchain, recently launched the CW-404 standard. This innovative move aims to rival Ethereum’s ERC-404.
As a matter of fact, it seeks to capture a portion of the investments currently flowing into Ethereum.
How Injective Will Compete Ethereum With CW-404 Standard
Through a strategic partnership with decentralized exchange DojoSwap, Injective has introduced the CW-404 standard. The CW-404 standard, a port of the experimental ERC-404, merges the capabilities of the CW-20 and CW-721 standards. Consequently, it promises to revolutionize fractional non-fungible token (NFT) standards.
“CW404 brings the massively popular ERC-404 standard to the fastest blockchain with the lowest fees, scaling fractional NFT standards to entirely new heights,” Injective said.
Injective’s strategy aims to divert some of Ethereum’s investment to its ecosystem. Significantly, the DojoSwap team has pioneered the application of CW-404 on Injective. They launched the Sushi Fighter NFT project, marking a new chapter in tokenization on the platform.
CW-404’s rival, the ERC-404 standard on Ethereum, known for enabling multiple wallets to co-own a single NFT, has been a financial game-changer. It allows holders to tokenize specific exposures for leveraging in loans or stakes. Despite its unofficial status, it has attracted millions of dollars to the Ethereum ecosystem.
The debut of the first ERC-404 token – Pandora, witnessed an extraordinary 12,500% surge. This innovative token combines the fungibility of ERC-20 tokens with the unique features of rare NFTs, heralding a new era of tokenization.
Read more: ERC-404 Tokens: A Complete Guide
However, the excitement was tempered by the subsequent sharp decline in the value of the Pandora token after reaching a peak at $32,836. The ERC-404 standard, developed by the pseudonymous “ctrl” and “Acme,” remains experimental. It has not yet been subjected to the Ethereum Improvement Proposal (EIP) vetting process.
There are concerns about the ERC-404 standard’s practical application, especially in lending pools. The risk that protocol mismatches could allow the withdrawal of high-value NFTs rather than their fungible fractions is significant.
This highlights the necessity for blockchain protocols to adapt carefully to new standards like ERC-404 and its Injective counterpart, CW-404.
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