These days Kyber's aggregator has recorded volume coming from some rather strange tokens. Research shows that there is a trend of ERC404 tokens (erc not found haha), they seem to be the cause of the rather high gas price helping to burn more ETH. Its operating mechanism is quite humorous but also very interesting as below.

With ERC404, you will hold the NFT and an amount of ERC20 representing that NFT. That is, it tries to make it possible to have a non-fungible but fungible product. Haha. It's true that this crypto world is very funny.

Let's say 1 NFT comes with 10 tokens. The price of that NFT is $10, considering the price of each token is $1. Normally, you have to find someone with $10 and buy the NFT to sell it. With ERC404, you have the right to sell 1 token to someone with $1. Cheaper, more people can buy, easier to sell, better liquidity.

Oh wait, what about selling an NFT? If you have 10 tokens, you sell 1 and have 9, then your NFT is lost haha. Because you don't have enough 1 NFT, if you buy 1 token from another person, you will have 10 tokens and 1 new NFT will be minted for you right in the transaction where you receive the other 1 token. 😆

=== It's that simple, so why has it become a trend recently?

Because it's new and because it's funny. Haha. However, it also opens up some pretty cool use cases for the NFT world as follows:

1. ERC404 NFTs will be much easier to collateralize, working directly with DeFi protocols like aave. This is crucial to opening up the world of NFT finance. Leverage is there, success or failure is also there.