1. What is BC-404?
BC-404 stands for "Bonding Curve 404" and is the first NFT contract to implement a deflation mechanism in the cryptocurrency field. By combining the ERC-20 and ERC-721 standards, BC-404 introduces a more complex dynamic difficulty adjustment mechanism and token destruction mechanism while retaining the basic functions of ERC-404, thereby increasing the scarcity and market value of NFTs.
2.What is the difference between ERC-404 and BC-404?
At this point, it may be a little difficult for everyone to understand. I will draw a picture for everyone to see, and everyone will roughly understand it. đđđ
1. Relationship between BC-404 tokens and NFT
âBC-404 Token + Bonding Curve Model = BC-404 NFTâ
It can be understood here that BC-404 NFT is generated through a mathematical model called a bond curve. In this model, the number of tokens required to generate NFTs gradually increases with each new NFT generated.
Specifically:
BC-404 Tokens: These are the base tokens required to generate BC-404 NFTs.
Bonding Curve Model: This is a mechanism that determines the number of tokens required to generate each new NFT. As the number of NFTs generated increases, the number of tokens required will also increase according to a certain curve, such as linear growth or exponential growth.
Generate BC-404 NFTs: By combining the BC-404 token and the bond curve model, the number of tokens required to generate a new NFT is different each time, making the scarcity and market value of each NFT continuously increase.
This means that the generation of BC-404 NFTs is not just a simple token exchange, but goes through a complex dynamic calculation process to ensure that each newly generated NFT is more difficult to obtain than the previous one.
2. Ownership
Under the framework of BC-404, the relationship between tokens and NFTs can be understood as:
Holding <1 BC-404 token: If you do not hold enough BC-404 tokens to generate a complete NFT, you can only hold these tokens but cannot generate new NFTs. For example, if generating an NFT requires 1 or more BC-404 tokens and you hold less than 1 token, you cannot generate new NFTs.
Hold â„1 BC-404 token: When the number of BC-404 tokens you hold reaches or exceeds the minimum number required to generate an NFT (usually 1 or more), you can generate a new NFT. The number of tokens required to generate each new NFT will gradually increase. For example, the first NFT may require 1 token, the second may require 2 tokens, and so on.
This means that the number of tokens held directly determines whether you can generate new NFTs, and how many tokens are needed to generate them. If you think itâs too complicated, you can look at the table below đđđ
The table illustrates the differences between ERC-404 and BC-404 NFTs in terms of token to NFT ratios and transactions and transfers:
ERC-404 NFTïŒ
Token and NFT Ratio: Each NFT contains the same and fixed number of tokens.
Trading and Transfers: When traded or transferred, NFTs carry a fixed number of tokens.
BC-404 NFTïŒ
Token and NFT Ratio: The number of tokens contained in each NFT is not fixed. The number of tokens contained in each NFT is different, reflecting the number of tokens required to generate the NFT.
Trading and Transfers: When traded or transferred, the number of tokens carried by an NFT corresponds to the number of tokens required to generate the NFT, which gives each NFT a unique market value.
This table illustrates the differences between ERC-404 and BC-404 NFTs in terms of the binding method and transfer mechanism of tokens and NFTs.
3. Trading and destruction mechanism
Holding 1 BC-404 NFT + transferring some tokens = possible triggering of NFT destruction:
If you hold a BC-404 NFT and a certain number of tokens are associated with it, when you transfer part of these tokens, it may result in insufficient remaining tokens to support this NFT. In this case, the system may automatically destroy this NFT.
Letâs say you have an NFT that requires 10 tokens, but you transfer 5 tokens, the remaining 5 tokens are not enough to support the NFT, so the NFT will be destroyed.
2. Holding some tokens + buying more tokens = generating new NFTs:
If you have some BC-404 tokens, but not enough to generate an NFT, you can buy more tokens. When you have the required number of tokens to generate an NFT, you can generate a new NFT.
You currently have 3 tokens, and generating an NFT requires 10 tokens. When you purchase an additional 7 tokens, you can generate a new BC-404 NFT.
3. Hold 1 BC-404 NFT + sell token = sell BC-404 NFT, destroy the original NFT:
When you hold a BC-404 NFT and sell the tokens tied to it, these tokens will be transferred to the buyer along with the NFT. Since these tokens are tied to the NFT, once sold, the original NFT will be destroyed and a new NFT will be generated in the new holder's account.
You have an NFT that contains 15 tokens. When you sell these 15 tokens, the original NFT is destroyed and a new NFT is generated on the buyer's side.
3.How is BC-404 destroyed?
So-called destruction: When a BC-404 NFT is destroyed, its unique ID becomes invalid and can no longer be used.
Cannot be transferred again: The destroyed NFT and its ID no longer exist in the system, so no transactions or transfers can be made.
Reduction in the number of NFTs on the market: Every time an NFT is destroyed, the total number of NFTs on the market decreases by one, increasing the scarcity and value of the remaining NFTs.
This ensures the deflationary nature of the BC-404 series, making the remaining NFTs more scarce and valuable.
4. Key features of BC-404
Decentralized value consensus:
BC-404 gives each NFT unique token content, and the market and community members determine its value, embodying the spirit of decentralization.
Increase NFT scarcity:
Through a dynamic generation and destruction mechanism, BC-404 ensures the scarcity of NFTs.
Improved reset mechanism:
Unlike ERC-404, transferring tokens increases the difficulty of generating new NFTs, helping to maintain market trading vitality.
Interesting trading dynamics:
Market participants need to choose between purchasing NFTs directly or purchasing tokens to generate new NFTs, weighing the cost and randomness.
In general, BC-404 is an innovative and promising project. It improves the scarcity and market value of NFTs through a unique token and NFT generation mechanism, and ensures the market and community's recognition of the real demand and value of NFTs through decentralized value consensus.
If you are interested, you can follow Color Protocol official Twitter: @Color_BC404
Now in the whitelist stage, those who get the whitelist can directly convert ERC 20 $PEPE to #BC-404 $colorpepe on their official website and generate PEPE PFP.
