Australian Court Rules on Non-Standard ERC-404 Tokens on Ethereum Network
The use of non-standard ERC-404 tokens on the Ethereum network has raised concerns, and an Australian court ruling sheds light on the issue. Although these tokens do not meet Ethereum’s token standards, developers have referred to them as such. The court emphasized the need to carefully consider the elevated gas fees associated with these tokens in light of their potential benefits.
Gas Fees Surge on Ethereum Network due to Non-Standard ERC-404 Tokens
Interest in non-standard ERC-404 tokens has led to a surge in gas prices on the Ethereum network. On February 9th, gas prices reached an eight-month high, with average costs peaking at 70 gwei ($60 per transaction). Some charges even reached 377 gwei. Developers are actively working to reduce these gas fees, acknowledging their substantial impact on transactions involving ERC-404 tokens.
Gaslite Analysis Reveals Excessive Gas Usage for ERC-404 Tokens
Gaslite, a gas usage analysis firm, has found that ERC-404 tokens require three times more gas than the average non-fungible token (NFT) trade. On average, an ERC404 transfer uses 125,000 gas units, compared to the average ERC721A transfer. The high gas fees associated with these transactions are a cause for concern within the crypto community.
Proposed Solutions to Address High Gas Fees
Gaslite has proposed two options to tackle the issue of high gas fees for ERC-404 tokens. The first option is to develop a more optimized and compliant version of the ERC-404 token standard. The second option is to disregard the non-standard tokens and allow them to fade away.
Factors Influencing Gas Prices on Ethereum Network
Gas prices on the Ethereum network are influenced by various factors, similar to fuel costs for consumers. Supply and demand dynamics, regulatory changes, and technological advancements all contribute to the volatility of gas prices.
Caution Advised for ERC-404 Tokens
Although ERC-404 tokens offer potential benefits, they are still highly experimental and risky. Developers are working to refine their functionalities, but caution is advised when dealing with newly launched cryptocurrencies. Technical stability and security have yet to be proven, and thorough evaluation of the current gas fees is necessary.
Ethereum’s Scaling Challenges Highlighted
The surge in gas fees once again highlights Ethereum’s scaling challenges when faced with heavy network traffic. Continued innovation and improvements in efficiency and capacity are necessary for wider adoption of the Ethereum network.
Analyst comment
Neutral
As an analyst, the market is likely to experience some volatility due to the elevated gas fees associated with non-standard ERC-404 tokens on the Ethereum network. Developers are actively working to reduce these fees, but caution is advised when dealing with these tokens. Ethereum’s scaling challenges need to be addressed for wider adoption.
