<h3 id="introduction">Introduction:</h3>Recently, a new NFT standard called BC-404 has emerged following the advent of the ERC-404 standard, bringing fresh possibilities to the NFT market.BC-404, which stands for Bonding Curve 404, is the first deflationary NFT contract in the cryptocurrency space, building upon and improving the ERC-404 standard. This article will explore the innovative BC-404 standard, combining the strengths of ERC-404 with new advancements.<h3 id="the-erc-404-protocol-standard">The ERC-404 Protocol Standard:</h3>In the last six months, the ERC-404 has been a groundbreaking innovation in the asset issuance domain of the Ethereum ecosystem. Introduced in early February by the Pandora team, ERC-404 is an experimental open-source token standard for creators and developers. It features a hybrid ERC-20/ERC-721 implementation with native liquidity and fractionalization capabilities. This is made possible through a quantitative correspondence logic between FTs and NFTs, enabling the minting and burning mechanism for NFTs.In simple terms, certain high-value NFT projects, particularly those with rare attributes, have become both expensive and illiquid. The introduction of ERC-404 signals a significant improvement for these previously illiquid NFT projects. These high-priced NFTs can now be fractionally traded on mainstream marketplaces, providing the same convenience and speed as purchasing assets like BTC or ETH.<img src="https://miro.medium.com/v2/resize:fit:1400/0*tugJngkBVEnlKoI6.png" /><h3 id="bc-404-token-standard">BC-404 Token Standard:</h3>The Color Protocol initially launched the ERC-404 conversion platform for Memecoin, where meme artists and communities could create their meme NFT collections in ERC-404. Holders could convert their Memecoin into NFTs.Utilizing the Bonding Curve model, COLOR introduced the BC-404 standard based on ERC-404. The required token amount for generating NFTs continues to increase until reaching a preset limit. Therefore, early participants have a cost advantage.In the ERC-404 contract, Tokens and NFTs have a fixed ratio, where the deployer can initially define how many ERC-404 Tokens an address needs to hold to generate an ERC-404 NFT. For example, 1 $Pandora Token can create 1 Pandora NFT, but if an address only holds 0.9 $Pandora, it cannot generate a Pandora NFT.BC-404 integrates the Bonding Curve model, changing the required amount of BC-404 tokens for generating BC-404 NFTs from a fixed amount to continually increasing. With each new BC-404 NFT generated, this value will rise, meaning each new NFT will be harder to generate than the previous one.When deploying a BC-404 contract, the deployer can set the initial difficulty for generating the first BC-404 NFT (i.e., how many BC-404 Tokens an address needs to hold) and the increment value for the difficulty of generating each subsequent BC-404 NFT.<img src="https://miro.medium.com/v2/resize:fit:1400/0*9y2LVD6_NLzXAJF1.png" /><h2 id="header-0">1/ Bonding Curve Model of BC-404 Standard:</h2>BC-404 can be designed using three different difficulty models. Color defines the NFT generation difficulty as “BC Count”: linear increase, Curved Increase with Accelerating Slope, and Curved Increase with Decelerating Slope.<img src="https://miro.medium.com/v2/resize:fit:1400/0*5M6OnhtCnTOOR7ao.png" /><h2 id="header-1">2/ Token content of BC-404 NFTs:</h2>Due to the varying amount of BC-404 tokens needed to generate each BC-404 NFT, the token content will also differ for different NFTs, corresponding to the number of tokens held and the number of NFTs generated. Conversely, each ERC-404 NFT will carry the same fixed amount of tokens.<h2 id="header-2">3/ BC-404 NFT ID:</h2>The value of BC-404 NFTs varies based on their token content, which is reflected in the NFT marketplace through the linking of NFT IDs with their token content (the BC Count at the time of generation).<ul><li>For instance, when a user purchases a BC-404 NFT with ID #1868, they receive 1868 BC-404 Tokens alongside the NFT.</li><li>Holders and traders can easily identify each NFT’s token content by looking at its ID in wallets or NFT marketplaces.</li><li>The NFT IDs are not required to start from #1 and can be determined by the initial BC count value set by the BC-404 contract deployer.</li><li>Additionally, the NFT IDs do not have to follow a sequential order and may be influenced by the BC count increment pattern established by the deployer.</li><li>Every NFT ID is distinct, and generating a new NFT will always involve a higher BC Count than any previous one, offering each BC-404 NFT its unique history.</li></ul><h2 id="header-3">4/ NFT Burn Mechanism and Deflation:</h2><ul><li>BC-404 NFT Trading and Transfer: Just like with ERC-404, when BC-404 NFTs are transferred, they will remain the same, and an equivalent amount of tokens will be transferred along with the NFTs.</li><li>BC-404 Token Trading and Transfer: When BC-404 tokens are traded or transferred, it may lead to the burning of BC-404 NFTs if there are not enough tokens left to support them post-transfer, similar to ERC-404 V1.</li><li>Each BC-404 NFT ID is unique and can only appear once. Once an NFT is destroyed, its ID cannot be renewed, resulting in a deflation of the BC-404 NFT collection, assuming a fixed total token supply set by the contract.</li><li>This unique feature makes BC-404 the first deflationary NFT contract in the cryptocurrency world.</li></ul><img src="https://miro.medium.com/v2/resize:fit:1400/0*IXwPUa_ROZfRpRvc" />Colorpepe:$colorpepe is the first BC-404 asset, and it generates the first pepe PFP series from $PEPE, deployed on Base. It combines the uniqueness and scarcity of NFTs with the popularity and liquidity of Memecoins. Through the conversion pool, users can convert $PEPE to the BC-404 standard (which can be bridged across chains if needed), giving native Memecoin assets NFT properties.Conversion details:<ul><li>Free conversion: Only pay gas fees, no additional costs.</li><li>Reversible conversion: $colorpepe can be converted back to $PEPE at any time, with the corresponding amount of $colorpepe being destroyed.</li><li>Limited supply: The total supply of $colorpepe tokens is limited, with a time window for conversion.</li><li>Whitelist priority: Conversion is divided into two stages, with the first stage limited to whitelisted addresses and the second stage open to the public.</li><li>Note: Make sure you have some $PEPE (ETH mainnet) in your wallet and enough $ETH to pay gas fees.)</li></ul><img src="https://miro.medium.com/v2/resize:fit:1400/0*WIS5HeRc7TfLM2Tc.png" />Features of BC-404:1/ Decentralized Value ConsensusBC-404 provides NFTs with unique inherent value by allowing the market and community members to determine the aesthetic value of each NFT. Rather than setting strict rules on rarity, BC-404 focuses on designing the numerical uniqueness of NFTs through their token contents, leaving it up to the community to decide on value. This approach aligns with the decentralized spirit of the crypto world.2/ Enhanced NFT ScarcityThrough a new mint &amp; burn mechanism, the scarcity of the BC-404 NFT Collection increases in tandem with token trading volume. This deflationary process addresses the imbalance between token and NFT liquidity in the market, ensuring ongoing trading vitality and profitability. Acquiring NFTs through token purchases becomes more challenging as the supply decreases.3/ Improved Reset MechanismThe BC-404 standard introduces a new reset mechanism that requires a higher BC count to generate a new NFT when transferring tokens. This adjustment helps maintain the vibrant trading dynamics of the NFT market.4/ Engaging Trading DynamicsParticipants in the BC-404 ecosystem face intriguing decisions when acquiring more NFTs — whether to buy existing NFTs directly or purchase tokens to generate new ones. Factors like market premiums, token costs, and the randomness of new NFT generation add complexity to trading strategies, challenging participants to think strategically and make informed decisions.<img src="https://miro.medium.com/v2/resize:fit:1400/0*BaN1pbaKy4o8nFxZ.png" />Potential Challenges and ProspectsWhile BC-404 brings many innovations, its complex mechanism may require some time for market participants to fully understand and accept. Effectively explaining the advantages and operation of BC-404 to users will be a major challenge in the initial stages of project promotion. Furthermore, BC-404 balances the liquidity of tokens and NFTs through its unique mechanism, but how to maintain this balance in practical operation and avoid extreme situations will be an issue that needs continuous attention.ConclusionBC-404 introduces a new dimension of value to the NFT market — token content, which will be an important measure of the value of individual NFTs. Looking to the future, BC-404 not only brings new possibilities to the NFT market but also provides a new dimension for valuing digital assets. Its emergence marks that NFTs are evolving towards a more complex and diverse direction, integrating token economics, deflation mechanisms, and dynamic pricing models. With the maturation of technology and the acceptance of the market, we can expect to see more innovative applications based on BC-404, truly expanding the audience of the 404 ecosystem and leading it towards prosperity.<h2 id="header-4">References:</h2><a href="https://docs.colorprotocol.com/?v&#61;25" rel="noopener noreferrer nofollow">https://docs.colorprotocol.com/?v&#61;25</a><img src="https://miro.medium.com/v2/resize:fit:1400/0*A7Na31OM-XwSE3o8.png" />NFTScan is the world’s largest NFT data infrastructure, including a professional NFT explorer and NFT developer platform, supporting the complete amount of NFT data for 20&#43; blockchains including Ethereum, Solana, BNBChain, Arbitrum, Optimism, and other major networks, providing NFT API for developers on various blockchains.Official Links:NFTScan: <a href="https://nftscan.com/" rel="noopener noreferrer nofollow">https://nftscan.com</a>Developer: <a href="https://developer.nftscan.com/" rel="noopener noreferrer nofollow">https://developer.nftscan.com</a>Twitter: <a href="https://twitter.com/nftscan_com" rel="noopener noreferrer nofollow">https://twitter.com/nftscan_com</a>Discord: <a href="https://discord.gg/nftscan" rel="noopener noreferrer nofollow">https://discord.gg/nftscan</a><a href="https://medium.com/nftscan/nftscan-launches-nftscan-connect-program-to-support-early-stage-web3-startups-1a0470698002" rel="noopener noreferrer nofollow">Join the NFTScan Connect Program</a>

What Is BC-404: A Comprehensive Guide to the Latest Deflationary NFT Standard

Daftar Isi

NFTScan

Artikel lain yang dipublikasikan pada 30 Jun 2024

Micheal Saylor Remains Bullish on Bitcoin Despite Drop in Trade

Why Bitcoin’s price correction can last for months

Crypto Investors Rally to BlockDAG Post $54.6M Presale Triumph; RNDR & MATIC Flounder Amid Market...

Bitget Research Highlights Surge in Deepfake Fraud

Agaswap's Trading Volume Skyrockets Το $3.3k - $2k In The Last 24 Hours

Polygon Powers Up CryptoGames Casino: A New Era of Crypto Gaming

Bergabunglah dengan buletin gratis kami untuk pembaruan kripto harian!