ERC-404 Definition

ERC-404 is an experimental token idea on Ethereum that tries to blend two worlds. It links fungible tokens, like typical ERC-20 coins, with unique NFTs from the ERC-721 world. The end result is a token that can behave like both, depending on how much you hold. It is not an official Ethereum standard and runs through project smart contracts rather than a finalized EIP.

Origin and naming

The concept appeared publicly in February 2024 from two pseudonymous developers known as “ctrl” and “Acme.” The name nods to the familiar “Error 404” on the web, but here it labels a hybrid token model. 

Design goal

ERC-404 aims to bring native liquidity to NFTs by linking a fungible token supply to a collection of NFTs. Instead of relying on external fractionalization protocols, the token itself carries the connection to the underlying NFT, which helps trading and pricing happen within the same contract system. 

How it works

At the core is a mint-and-burn link between the fungible side and the NFT side.

• When a wallet reaches a full unit of the ERC-404 token, the contract mints an associated NFT to that wallet.
• If that wallet later drops below one full unit, the NFT is burned, and the fractional ownership is reflected in the token balance.

Some implementations also describe a data handling trick called “pathing,” which packs token amount and ID information efficiently to save gas during transfers.

What makes it different from ERC-20 and ERC-721

Traditional ERC-20 tokens are interchangeable and divisible. ERC-721 tokens are unique and not divisible. ERC-404 combines these traits by letting tokens represent fractional exposure to a unique NFT when held in parts, and a specific NFT when held as a whole unit.

Semi-fungible behavior

Because holdings can shift between fractions and a whole, ERC-404 is often described as “semi-fungible.” This label reflects how a single design can feel fungible for partial balances and non-fungible once a balance reaches one whole token that maps to a specific NFT.

Example projects and adoption

Early experiments included Pandora and several other collections highlighted in explainers, which showcased how the model ties a fungible ticker to a set of “paired” NFTs. Interest grew quickly as traders explored liquidity pools and price discovery around the hybrid design.

Common use cases

Writers and educators point to three broad areas where the model could help:

• Asset tokenization: fractional access to high-value items such as art or real estate.
• DeFi integrations: using fractionalized exposure to route NFTs into lending or liquidity tools.
• Gaming items: trading small portions of rare in-game assets, while still allowing whole-item ownership when a player collects a full unit.

Risks and limitations

ERC-404 remains unofficial and experimental. That means several things: the approach has not gone through the EIP process, security review varies by project, and compatibility with existing token tools can be uneven. Volatility and speculative behavior have also been noted around early launches. Anyone interacting with an ERC-404 project is relying on that project’s smart contracts and audits.

Technical notes

Writers describe two implementation ideas that often appear together:

• Mint-and-burn coupling between fungible balances and NFTs to keep the state aligned.
• Efficiency techniques, such as pathing, can reduce storage use during transfers.

Exact details can differ by project, so behavior may not be identical across deployments.

Status in the standards process

As of the latest public explainers, ERC-404 is not an accepted Ethereum standard. There is no finalized EIP for it, and different teams can implement variations of the idea. Readers should check each project’s documentation to see how closely it follows the pattern and what audits have been done.