ERC404 to CW404, The Launch of CW404 standard by Injective and DojoSwap
The ERC-404 standard combines divisibility and uniqueness in tokens. It unlocked various opportunities in the realm of digital assets, enabling fractional ownership of NFTs and enhancing the versatility and liquidity of blockchain-based assets.
With the ERC404 standard, you could own a piece of rare digital artwork or a fraction of a virtual real estate property. This makes sure that previously inaccessible, high-value digital assets are more attainable and liquid.
Each ERC-404 token is tied to a specific NFT, creating a symbiotic relationship. When you buy a token, a corresponding one is minted in your wallet, and conversely, minting an NFT results in the generation of a fungible token linked to it.
Dividing a token into fractions for sale results in the associated NFT being burned. Intriguingly, when accumulating enough fractions to complete a whole token, a new NFT is created, ensuring that each integral token is always linked to an NFT. That is the mechanism of the ERC404 standard.
The Launch of CW404 Standard
CW404 standard is a sophisticated adaptation of the original ERC-404, designed to seamlessly integrate with the existing CW20 and CW721 standards. This innovation paves the way for the scaling of fractional NFT standards to unprecedented levels, offering users a unique and efficient platform for exploring the world of decentralized finance (DeFi).
Dojoswap is a Uniswap-inspired Automated Market-Maker (AMM) Decentralized Exchange built on the Injective blockchain. It enables a decentralized on-chain exchange for various assets involved in the Injective ecosystem.
DojoSwap has collaborated with Injective to build, launch, audit, and open-source the CW404 standard for all developers on Injective and Cosmos.
The CW404 standard endeavors to serve as an adaptation of the original ERC404 standard, incorporating bug fixes and patches. These modifications aim to align the token standard more closely with the function signatures found in the established CW20 and CW721 standards.
Properties of the CW404 Standard
1. NFT burn and mint during transfer:
When a user with 10 CW404 tokens transfers 1 CW404 to another user, one NFT is burned from the sender’s wallet, and a new NFT is minted in the recipient’s wallet. The recipient now possesses both the NFT and a token balance of 1.
2. Fluid Identity:
The CW404 token has a fluid identity. It identifies as both a CW20 as well as CW721 token.
3. Fractional NFT transfer:
Sending 0.5 CW404 tokens to another user results in the burning of 1 NFT, with no new NFTs minted, and a 0.5 token balance reflected in the recipient's wallet.
4. Versatility:
Owning a complete CW404 token entitles the user to receive a minted NFT in their wallet. The NFT can be transferred as a whole or in fractionalized CW20 tokens, enhancing liquidity. These CW20 tokens are versatile, allowing participation in decentralized exchanges like DojoSwap for liquidity provision and swaps.
CW20 tokens can be converted into Bank tokens, allowing them to be traded on platforms like Helix. The dynamic nature of the CW404 standard makes it well-suited for various DeFi applications. This versatility led to the standard being adapted to the Injective chain, sparking enthusiasm for DeFi.
The significance of CW404 Standard on the Injective Blockchain
1. Some dApps on the Injective Blockchain such as DojoSwap and Helix,have established a robust DeFi infrastructure to enhance liquidity and minimize slippage for CW404 tokens. DojoSwap focuses on utilizing yield farms to increase CW404 liquidity, providing liquidity farms for emerging 404 projects. Meanwhile, Helix operates an advanced on-chain DEX with highly concentrated liquidity, surpassing Uniswap V3 CLP, leading to reduced trading slippages and costs for users.
2. With transaction cost of less than $0.01,Injective boasts the lowest transaction gas fees in the Industry thanks to its recently introduced gas compression technology. Picture a $60 average ERC404 transaction fee compared to a mere $0.05 CW404 transaction fee, resulting in a remarkable 1000x savings. Users can freely engage in speculative activities with their preferred CW404 tokens without concerns about gas costs impacting their profits.
3. Injective is poised to initiate a comprehensive DeFi season with numerous dAppss actively building on the Blockchain. Including CW404 in the toolkit enhances the capabilities for developers building robustly on the platform.
4. Injective has one of the most friendly environment for builders. Being at the forefront of new technology poised to transform the usage of NFTs and tokens, Injective is positioned to embrace emerging trends swiftly. This enables DAPPs on Injective to leverage every initiative, creating a robust cycle that attracts both new users and developers to the blockchain.
Conclusion:
The launch of the CW404 standard by Injective and DojoSwap represents a significant evolution in token standards, introducing divisibility and uniqueness to enhance the liquidity and versatility of digital assets. The CW404 standard builds upon the original ERC-404, seamlessly integrating with CW20 and CW721 standards, fostering a unique platform for decentralized finance (DeFi) exploration.
The properties of CW404, such as fluid identity and fractionalized transfers showcase its adaptability and utility in various DeFi applications. The low transaction fees on the Injective blockchain further position CW404 as a cost-effective and efficient choice for users and developers.
As Injective initiates a comprehensive DeFi season with a focus on DAPP development, CW404 adds to the toolkit, contributing to a favorable environment for innovation and attracting both users and developers to the platform. The dynamic nature of CW404 and its integration with emerging technologies position it at the forefront of transforming the usage of NFTs and tokens in the blockchain space.
