If you were present at the 2021 cycle, then you will have experienced the madness of “monkey pictures” being snapped up at prices that the general public would find derisory. For the best, we were talking about prices that could run into the millions of dollars. Nowadays, most of them have been forgotten, but if you come across a crypto enthusiast from 2021 and mention names like “BoredAp”, “Pudgy” or “CryptoPunk”, the tears are likely to well up…
The fall
However, as most of you will have noticed, for some years now, NFTs have been losing the interest of the general public. The public has grown weary of simple “drawings” whose sole purpose is to be artistic. For yes, an NFT is first and foremost a technological revolution that completely changes the paradigm of asset ownership. Understand that the strength of an NFT lies in its uniqueness and inviolability.
By its very nature, it is Non Fungible Token (NFT), i.e. it cannot be divided into several copies, unlike Bitcoin, which can be divided into several tokens. A painting or sculpture, if perfectly replicated, cannot be dissociated from the original work, unlike an NFT, which thanks to Blockchain technology has its own digital address, cannot be associated with any image other than its own. The image can be screened, but the address linked to the screen will not be the right one.
An NFT is basically capable of holding all your private documents linked to a single digital address; in other words, no need to carry around a wallet containing your documents. The NFT assigned to you will suffice.
Unfortunately, this fundamental technology is scorned because too few projects take a real interest in it, most only profiting from their financial interest. It is this financial interest that has gradually sunk NFT into the abyss of the ecosystem, propelled by scams numbering in the thousands.
The revival
However, you’re not supposed to know that every Bull Run is driven by a narrative outperforming the rest of the market. In 2017, we were treated to DeFi with the Ethereum rush, in 2021, NFTs, and for 2024, many agree that the AI and RWA sector should lead the movement with tokens like $TAO, $QUBIC or even $NXRA.
But a few months ago, a new technology appeared on the scene, one that redefines the whole of NFT technology. While NFTs were originally Non Fungible in nature, with the arrival of ERC-404 it’s a completely different story.
ERC-404s are a blend of ERC20 technology (the standard for token issuance on Ethereum) and ERC-721s (better known as NFTs).
In simple terms, the ERC-404 allows you to associate a token with an NFT, but I think an example is better than a long paragraph to explain how it works.
If a project decides to release 100 NFTs and 100 tokens, and each token is therefore linked to an NFT (a 1:1 ratio), and if the investor buys the entire token, he or she will receive the associated NFT (which varies according to the collection) in his or her portfolio.
However, if the investor is not in a position to buy the whole token, he will buy half of it; the NFT, being linked to the token to preserve the 1:1 parity, will be burned and consequently recover the NFT once the whole token has been acquired, the NFT being mined directly in his wallet.
Why is this a paradigm shift?
We’ll be able to make the NFT market liquid and, above all, fungible. Unlike traditional NFTs, where you need a buyer to sell, here tokens can be sold at any time as long as there is liquidity in the pool. What’s more, indirectly, we’ll be able to split NFTs, enabling investors who can’t afford to buy a whole NFT to still have the opportunity to gain exposure to large collections.
This ERC-404 hype will have a trickle-down effect on cash flow, which will naturally turn to the traditional collections, which will regain their former prices. This is already the case for Pudgy, which has posted a +500% increase over the last few days.
To conclude, and on the assumption that every Bull Run brings us closer to the adoption of Blockchain technology by the general public, then NFTs will be the precursors. For example, tickets to concerts or festivals paid for in Ether, or as mentioned above, the container for our personal documents (such as our identity card), or even one of the recurring uses of NFTs when we talk about the adoption of NFTs by the general public, is the world of gaming. Games, skins, rewards and much more; all in the form of NFTs would be a perfect blend of technology education and the fun aspect of gaming.
Article in collaboration with Crypto Brokie
