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SimpDoge Community: What changes has ERC404 brought to us?

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Simpdoge uses the ERC404 standard to innovatively explore a new paradigm of Web3 community economy and business model on Arbitrum.

Source: SimpDoge Community

Simpdoge is the first ERC404 asset on Arbitrum, aiming to explore a new Web3 community economic model through the ERC404 protocol, while attempting to solve the liquidity of NFT assets and enhance the commercial scalability of the Web3 community.

Community economy is a growing trend of economic activities between groups based on shared interests, values, or goals. With the development of social media and digital platforms, community economy has become an important way for brands and companies to establish deeper relationships with their users or consumers. In this economic model, community participation and interaction not only enhance brand loyalty, but also drive innovation of new products and expansion of the market. By leveraging the power of communities, companies can more effectively reach their target markets while promoting positive interaction and support among users.

In recent years, the integration of NFT and community economy has received increasing attention. NFT provides a unique way to motivate and reward community members' participation, deepen users' sense of belonging and participation through limited edition digital assets, community-exclusive collections, and other forms. In addition, NFT has also become a new tool for internal economic activities within the community, allowing the community to create value and profits through buying, selling, exchanging, or sharing these unique digital assets. With the advancement of technology, the emergence of new standards such as ERC404 provides more possibilities for the application of NFT in community economy, including the division of ownership and the improvement of liquidity of assets, further expanding the boundaries and potential of community economy.

Despite the enormous potential of combining NFTs and community economies, there are also a series of challenges, including technical limitations, market volatility, legal and regulatory issues, etc. With the development of technology standards such as ERC404, these challenges are expected to be addressed, paving the way for further integration of NFTs and community economies. In the future, as more enterprises and organizations explore and implement these technologies, we can expect to see a wider and deeper integration of NFTs and community economies in innovation, participation, and value creation.

Basic Principles and Characteristics of ERC404

ERC404 is an innovative blockchain technology standard that aims to combine the advantages of the popular Ethereum token standards ERC20 and ERC721 to support the fractional ownership and liquidity of NFTs. The following is an explanation of how ERC404 achieves this goal:

Combining ERC20 and ERC721 Standards

ERC20 Standard: Represents a standard for homogeneous tokens, which means that each token is identical and can be traded and divided seamlessly. These tokens are typically used to represent currency, points, or other homogeneous assets.

ERC721 Standard: Represents a standard for non-fungible tokens, which means that each token is unique and cannot be divided. These tokens are typically used to represent unique items or assets, such as digital art, collectibles, and more.

ERC404 allows developers to create divisible ownership shares for NFTs by creatively combining these two standards. This means that a unique asset represented by an ERC721 (such as a digital artwork) can be divided into multiple tradable shares, which are represented by ERC20 tokens. Each ERC20 token share represents partial ownership of the original ERC721 token asset.

Supporting NFT for fractional ownership and liquidity

Ownership fragmentation: By allowing NFTs (such as ERC721 tokens) to be divided into multiple tradable shares (such as ERC20 tokens), ERC404 enables users to own and trade a portion of an NFT. This mechanism allows even high-value NFTs to be accessible to ordinary investors with smaller investments, thus lowering the investment threshold.

Enhanced Liquidity: The division of ownership of NFTs means that their shares can be freely traded on the market like traditional homogenized tokens, greatly increasing the liquidity of the NFT market. Higher liquidity makes NFTs easier to buy and sell, increases market activity, and may attract more investors and collectors to participate.

Cross-chain interoperability

Through this combination, ERC404 brings new possibilities to the NFT market, including broader participation, higher asset liquidity, and innovative financial product development. The launch of this standard is not only beneficial to NFT creators and collectors, but also provides new investment channels for investors, while promoting the development of the entire digital asset market.

ERC404 How to Allow Tradable NFT Shares and What It Means for Community Economy

The ERC404 standard allows for the ownership of NFTs to be divided into multiple tradable shares, creating a new market dynamic and economic model, particularly for community economies. The innovative approach and its significance for community economies can be discussed from the following perspectives:

How to create tradable NFT shares

Ownership fragmentation: ERC404 allows the ownership of an NFT to be divided into multiple shares, each represented by an ERC20 token. This means that if you own a valuable digital artwork NFT, you can divide it into 100 shares (or any other number) and each share will be represented by an ERC20 token.

Tradability of Shares: These ERC20 token shares can be freely bought and sold on various trading platforms, just like any other cryptocurrency or token. This introduces unprecedented liquidity to the NFT market, as investors can now choose to purchase a portion of an NFT instead of having to bear the full cost of purchasing the entire NFT.

Value dynamics: As the market's interest in a certain NFT increases, the value of the ERC20 token representing a share of that NFT may also rise, allowing investors to profit from their investment.

The significance of community economy

Lowering the investment threshold: By making a portion of NFTs available for purchase, ERC404 significantly reduces the entry barrier, allowing more community members to participate in high-value NFT investments that may have been previously unaffordable. This inclusivity enhances the economic vitality and diversity of the community.

Enhancing community engagement: Community members can now directly participate in projects or art works within the community by investing in NFT shares, increasing their sense of participation and belonging. This participation is not limited to economic investment, but also includes recognition and support for community culture and values.

Innovative financing model: For artists, creators, and community projects, ERC404 provides a new way of financing. By selling shares of NFTs, they can raise funds to support the development of new projects while retaining partial ownership of the original works.

Promoting the development of the internal economy of the community: ERC404 provides a mechanism for sharing and trading unique assets within the community, promoting the development of the internal economy. Community members can not only achieve economic benefits through buying and selling NFT shares, but also strengthen the internal connections and cooperation of the community in this way.

Increasing the sustainability of community projects: By allowing community members to invest in and benefit from community assets, ERC404 increases the sustainability of these projects. This economic incentive mechanism encourages more participation and investment, providing long-term support and a stable source of funding for community projects.

Overall, ERC404 opens up new avenues for community participation, innovation, and growth by making NFT shares tradable, increasing the liquidity and accessibility of NFTs. This marks a new attempt at the development of community economy and the expansion of community business.

ERC404 Popular Assets

Simpdoge is the first ERC404 asset on Arbitrum, aiming to explore a brand new Web3 community culture through ERC404 and enhance the commercial scalability of the Web3 community while solving the liquidity of NFT assets. The total issuance of SIMP is 10,000 (contract address 0xc06cbecaa987ca894bc81db29b3887995c81b47d), which was fairly launched by SimpDao. Currently, the LP has been burned (burn hash: https://arbiscan.io/tx/0x18350e09d1507d944578adac8499bf14adc078036044ef60cf44d67f14c7c255), achieving complete decentralization.