he experimental ERC-404 token standard was released on Ethereum just two weeks ago but it has already attracted massive interest and investment. Collectively, ERC-404 tokens are worth over $173 million according to CoinMarketCap. This brief but fervent enthusiasm around the new standard gave Injective an idea - why not create a similar standard for their own blockchain?
Capitalizing on ERC-404 Mania
As a Layer 1 blockchain built using Cosmos SDK, Injective wanted to find a way to bring some of the excitement from Ethereum over to its emerging network. The team saw ERC-404 as a chance to do just that. By launching an equivalent implementation of the standard called CW-404, Injective aims to leverage the hype still surrounding ERC-404 and divert some of that interest and investment to building on its own chain.
What is ERC-404?
To understand CW-404, it's important to explain what ERC-404 is attempting to do on Ethereum first. The standard was created as an experimental protocol that allows for shared ownership of non-fungible tokens (NFTs). It gives holders the ability to tokenize the exposure they have to a specific NFT. This tokenized exposure can then be used for things like taking out loans or staking holdings without needing to transfer ownership of the underlying NFT.
While an innovative concept, ERC-404 tokens have also faced criticism for using the official-sounding "ERC" prefix without being an officially endorsed Ethereum standard. Nevertheless, it was clearly able to strike a nerve and generate massive interest from the Ethereum community in a very short time frame.
Introducing CW-404
Injective is now hoping to replicate this excitement on its own blockchain with the launch of CW-404 in partnership with DEX DojoSwap. CW-404 is described as a port of the ERC-404 standard, combining the CW-20 and CW-721 token standards used on Cosmos-based blockchains.
DojoSwap will be the first platform to support the new standard, allowing traders to list and swap CW-404 tokens. The collaboration aims to build on the Proof of concept ERC-404 established and demonstrate how a comparable implementation could thrive when brought to Injective's emerging smart contract capabilities.
By establishing CW-404, Injective hopes developers will start creating innovative applications of shared NFT ownership and tokenized exposure on its blockchain as well. Only time will tell if CW-404 manages to capture any of the hype that propelled ERC-404 to new heights in its brief existence so far. But for Injective, having a similar standard of its own is a clear strategic effort to promote more activity and investment in its ecosystem.
