Ethereum gas fees hit 8-month high amid ERC-404 craze

As traders raced to seize the opportunity presented by the early phases of the ERC-404 trend, gas fees on the Ethereum network hit levels not seen since March 2023. Amidst a flurry of interest in a new, unauthorized experimental token standard called ERC-404, Ethereum network gas fees hit an eight-month high.

Ethereum network gas prices peaked on February 9 at an average of 70 gwei, or $60 for a normal transaction. The top gas price surged to 377 gwei, a figure not seen since May 12, 2023. Although there are several reasons for the jump in gas prices, it happened when the ERC-404 token standard started to gain traction in the cryptocurrency community.

Revolutionizing NFT Ownership and Utility while Reducing gas Fees

On February 5, the experimental standard known as ERC-404 was launched by a team named Pandora. Since then, its volume has exceeded $474 million and it has risen almost 6,100%.

The goal of ERC-404 is to link ERC-721 nonfungible tokens (NFTs) to ERC-20 tokens. This enables the creation of what some have referred to as fractionalized NFTs, which let different wallets own different shares of a single NFT and utilize those shares for lending or trading.

The new breed of token has the prefix “ERC” attached to it, although the name is still very much unofficial. One of the Pandora project’s developers, going by the handle “ctrl,” told Cointelegraph on February 9 that the group was aiming to “dramatically reduce” gas prices.

“We’re trying to optimize for gas because that’s a big part of adoption and protocols wanting to integrate […] So in certain cases, we’re able to potentially reduce gas fees by like 300% to 400%.”

The co-founder of the gas-auditing company Gaslite, anonymous X user PopPunk, claims that an ERC404 token consumes almost three times the gas needed for a typical NFT transaction.

On February 9, a surge in activity on the decentralized trading system Uniswap was the primary cause of network utilization.

According to data from cryptocurrency aggregator Birdeye, a large portion of this activity can attributed to the noteworthy trade volumes produced by Pandora, DeFrogs, and some other ERC-404 projects that boast a combined trading volume of over $600 million in the last week.