📈ERC404 / DN404
The NFTs on gm.app implement the ERC404 protocol. This means that they are NFTs and fulfill the ERC721 standard but also fulfill the most popular fungible token standard (ERC20).
What does that mean?
If you mint a NFT on gm.app you not only get a NFT but also fungible tokens. So if you e.g. buy a "Bacon Farmer" (one of the first collections on gm.app) you will also get 10.000 $BACON token.
If you sell or transfer some of the $BACON tokens, you will lose your NFT. If you buy the $BACON token back, you will receive an NFT again.
The 10.000 $BACON tokens represent the 1 Bacon Farmer NFT you have. You can see the $BACON token as a fractionalized representation of your NFT.
Likewise, if you have 20.000 $BACON tokens you also own 2 Bacon Farmer NFTs and vice versa.
What's the advantage?
The main advantages of ERC404 tokens over pure NFTs are that
they integrate with many DeFi dapps like DEXs. NFTs don't work with DEXs, but fungible tokens do. So if you want (and somebody sets up a liquidity pool) you can just buy 10.000 $BACON token on Uniswap and have therefore bought a Bacon Farmer NFT on a DEX.
they enable users to hold fractions of NFTs. Bacon Farmers too expensive? Just buy a fraction of it. For example, 1.000 $BACON, which represents 1/10th of one Bacon Farmer.
they enable the listing of NFT collections on centralized exchanges, because the (eco-)systems of these exchanges are usually built for fungible tokens and cannot handle NFTs.
TLDR: ERC404 potentially brings more liquidity to NFT ecosystems and makes them more accessible.
What's DN404?
DN404 is the implementation of ERC404 that we use. It can be found here https://github.com/Vectorized/dn404
You can also read more about it here https://x.com/0xCygaar/status/1757136657286119916
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