ERC- 404 revealed, web3 events and more

WEB3
New fronts for web3 allies!

Yuga Labs acquires PROOF, including PROOF Collective, Moonbirds, Oddities, Mythics, and Grails exhibition series. With an undisclosed deal amount, Yuga Labs will become the owner of all PROOF’s assets, including the IP, the team, and the artistic portfolio. The first step will be bringing Moonbirds into Otherside—a metaverse space where web3 brands, communities, and creators engage launched last year. PROOF’s founder, Kevin Rose, will become an advisor to the company after completing the brief handover period.
What’s the point? Yuga Labs is the leading web3 lifestyle and media company, known for creating BAYC, TwelveFold, and Otherside. Moreover, they own CryptoPunks, Meebits, and 10KTF. With the latest PROOF acquisition, Yuga Labs' vision to become the front door of web3 is one step closer, as people are referring to it as the “Disney of Web3.”

Chainlink has partnered with Telefonica, one of the world’s largest telecommunication service providers, to enhance Web3 security by integrating Telco capabilities into the blockchain industry. The first phase of this initiative aims to prevent exploits such as “SIM Swap,” a hacking method that relies on identity theft and false impersonation, and it will be initially deployed in Brazil.
What’s the point? The “SIM Swap” trick is common in the Web3 industry. For example, in 2022, there were fraud cases totaling $400 million at Sam Bankman-Fried’s FTX exchange during its collapse, as well as involving the SEC’s X account, among others. Now, developers on the Polygon mainnet using Chainlink's features can use Telco APIs to make blockchain transactions more secure as smart contracts will be able to spot unauthorized SIM card changes.

Pudgy Penguins is adding 1,100 new Walmart locations and featuring licensed Penguins from the community. With prices ranging from $2.99 to $11.97, each toy offers an on-chain experience powered by ZKsync. By scanning a QR code and signing up via email, customers can enter the Pudgy World and seamlessly engage with blockchain technology. Additionally, as part of the brand's commitment to supporting creators, all buyers are encouraged to share their unboxing videos and will be rewarded for their contributions.
What’s the point? During the spring of 2023, Pudgy Penguins became the number one seller on Amazon and won Toy Insider’s Top Summer Toy in 2023, resulting in nearly $500,000 worth of toys sold on Amazon. This strategic move of extending the on-chain brand to physical collectibles positioned Pudgy Penguins at the forefront of a new era for products and experiences powered by web3.

IN THE MEANTIME

• Empire State Building rolls out an NFT-driven loyalty program

• Sephora enters web3 through SephoraUniverse

• Forbs joins the Metaverse

• Metamask counts 30+ million MAU

• YC wants Stablecoin startups

INSIGHTS
ERC-404 explained!

There's been a recent buzz surrounding ERC-404, which currently boasts a market cap of around $196 million, as well as the Pandora project.

Let's dive into understanding this token standard without getting lost in technical jargon.

Please note: This content is for educational purposes only. It does not constitute financial advice, so always do your own research (DYOR)!

ERC-404 stands as an experimental standard, yet to be approved through the Ethereum Improvement Proposal (EIP) process. It was developed by pseudonymous builders known as "ctrl" and "Acme." Since it's unofficial and hasn't undergone auditing, there's a possibility of smart contract risks and vulnerabilities.

This semi-fungible token combines ERC-20 (fungible) and ERC-721 (non-fungible tokens), resulting in a unique asset that possesses characteristics of both.

In essence, ERC-404 tokens bond an ERC-721 token to an ERC-20 token. However, the ERC-20 token only represents a non-fungible token (NFT) when it remains whole. If it's fragmented for trading as an ERC-20 token, the NFT is burned. Conversely, a new NFT is minted when two complementary fractions are combined to form full tokens.

The primary goal of ERC-404 is to boost the liquidity of combined NFTs by facilitating trading through a pool of fungible tokens. This enables token holders to sell their assets through decentralized exchanges, streamlining the process compared to the traditional method of listing NFTs and waiting for buyers. Additionally, ERC-404 aims to enable native fractionalization within NFT collections, allowing traders to purchase portions of NFTs in the form of ERC-20 tokens.

Despite being experimental, ERC-404 tokens are already available on supported exchanges and listed on NFT marketplaces like OpenSea and Blur.

Pandora emerges as the pioneer ERC-404 token, representing a fusion of 10,000 ERC-20 tokens and 10,000 ERC-721 tokens as Replicants. When the Pandora token is divided, the attached Replicant is incinerated. However, acquiring a whole Pandora token prompts the minting of a new random Replicant. The Pandora team announced the successful development of its token on February 2nd via X. Subsequently, NFT graphics were released, and the token was listed on Uniswap. Within the first 5 hours of trading, it surpassed $10 million in volume. As of now, the Pandora NFT's floor price stands at 6.9 ETH, with a market cap of approximately $181,869,250.

Other notable ERC-404 token projects include DeFrogs, Punks404, Monkees, and EtherRock404.

Undoubtedly, we'll witness numerous projects exploring ERC-404's potential, despite ongoing efforts by developers to address its main criticisms—especially concerning transaction costs and network consumption. This has prompted the development of the DN-404 standard, employing a two-contract structure: a 'base' ERC-20 and a 'mirror' ERC-721.

We're still in the early stages of both standards, navigating uncharted territory. However, their potential holds promise for reshaping interactions with digital assets, promoting liquidity, and enhancing ownership.

AI
AI intelligence is on the rise!

OpenAI announces Sora, their newest text-to-video model, which has captured everyone’s attention on X with its impressive videos. Poised to revolutionize video creation, the current model can generate high-quality videos up to 60 seconds long from a text prompt. With the ability to depict multiple characters, defined motions, accurate details, and rich backgrounds, Sora demonstrates a deep understanding of how things exist in the physical world. However, it will (or already does) reject prompts that violate OpenAI's content policy. Before its release to the general public at an unspecified future date, the team's work is still in progress, with specialized users testing it for potential harm and providing feedback for further improvements.

Adobe has launched an AI assistant in Acrobat, allowing users to interact with documents to quickly obtain answers and one-click summaries. The current beta version is available for Acrobat Standard and Pro customers with Individual or Teams subscriptions, as well as Acrobat Pro trial users, on both the desktop and web app. The AI assistant is capable of reading text documents and PDFs in English initially, with plans to add support for more languages in the future.

Slack rolls out Slack AI to help users quickly find answers, receive channel recaps and thread summaries. This intuitive experience enables users to easily find answers thanks to AI as the company stated that during the pilot test, their customer saved “an average of 97 minutes per user each week to find answers, distill knowledge and spark ideas.” Slack AI is available as a paid add-on for Enterprise plans and is available in English. Moreover, the company stated that they won’t use the data to train LLMs and it is hosted directly within Slack.

EVENTS
What’s happening in March?

Check out the events connecting web3 and crypto folks around the world

03/01 Ethereum Argentina

03/02 Blockchain Festival Asia in Singapore

03/03 Crypto Expo Europe in Bucharest, Romania

03/08 ETH Oxford

03/18 Digital Asset Summit by Blockworks in London

03/20 USC Blockchain Conference in Los Angeles, CA

03/25 Real World Crypto in Toronto, Canada

03/28 Solana Hacker House in New York City

03/30 Deficon in New York City

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