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ERC-404 tokens continue to gain popularity, but crypto developers have pointed out the security risks of the yet-to-be-audited experimental standard.

The standard is a mixed implementation of ERC-20/ERC-721, where when you purchase a coin, an NFT automatically appears on your wallet. At the same time, it allows you to own a fractional part of the so-called “fractional” non-fungible token.

“The goal of ERC-404 is to allow NFTs to be traded with more reliable liquidity in pools of fungible tokens. They achieved this by essentially making transfers below a certain amount invalid.

The expert analyzed the ERC-404 code and noticed many common details with the standards taken as a basis. Changes appear in the transaction confirmation mechanism.

Quit explained that if the amount being sent is in the “minted token range”, the assets are moved in ERC-721 format, with a value above or zero – in ERC-20.

The developer also noted that the function, which emulates ERC721Enumerable, is “very expensive to maintain.” It is responsible for displaying a list of all tokens owned by the account.