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Surge in Ethereum Network Gas Fees

The Ethereum network has recently experienced a significant increase in gas fees, reaching an eight-month high due to a surge of interest in a new, unofficial experimental token standard known as ERC-404.

The spike in gas prices hit an average peak of 70 gwei ($60 for a standard transaction) on Feb. 9, with peak gas costs reaching as high as 377 gwei, a level not seen since May 12, 2023.

One of the contributing factors to this surge in gas prices is the growing popularity of the ERC-404 token standard within the crypto sector.

The launch of the ERC-404 token standard by the Pandora project on Feb. 5 has led to a significant increase in its trading volume, surpassing $474 million, and experiencing a growth of over 6,100%.

ERC-404 enables the binding of ERC-721 nonfungible tokens (NFTs) to ERC-20 tokens, allowing for the creation of fractionalized NFTs, which enables multiple wallets to own a portion of a single NFT for trading or staking purposes.

Despite being labeled as an “ERC” token, the ERC-404 name is unofficial, and efforts are being made to reduce gas costs associated with the standard.

ÔÇ£WeÔÇÖre trying to optimize for gas because thatÔÇÖs a big part of adoption and protocols wanting to integrate […] So in certain cases, weÔÇÖre able to potentially reduce gas fees by like 300% to 400%.ÔÇØ

The use of ERC-404 tokens requires approximately three times the amount of gas needed for an average NFT transaction, according to PopPunk, co-founder of gas-auditing firm Gaslite.

An average ERC404 transfer is 125,000 gas units.

More than 3x the gas of an average ERC721A transfer.

This is nightmare fuel.

Gaslite could either:
1) build a more optimized (and more compliant version of this standard)
2) ignore it and let it fade into the ether

ÔÇö Pop Punk (@PopPunkOnChain) February 6, 2024

The surge in network usage on Feb. 9 can be attributed to increased activity on the Uniswap decentralized exchange protocol, driven by significant trading volumes generated by ERC-404 projects such as Pandora and DeFrogs.

The combined trading volume of these ERC-404 projects has exceeded $600 million in the last week.

How AI legalese decoder can Help

The AI legalese decoder can assist users in understanding the complex legal language and implications associated with the ERC-404 token standard. By using AI technology, the legalese decoder can simplify and clarify legal documents and terms related to ERC-404, helping individuals make informed decisions and navigate the regulatory landscape surrounding this experimental token standard. Additionally, the AI legalese decoder can provide insights into potential regulatory challenges and gas cost optimizations related to ERC-404, empowering users to stay informed and compliant within the evolving legal and technological framework of cryptocurrencies and blockchain-based tokens.

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