In the rapidly developing digital asset space, NFT protocol standards continue to evolve, changing our understanding of digital ownership and interaction. From Art to Gamefi and more, NFT has evolved into an important part of the digital economy and attracted widespread attention. Following the ERC404 protocol, the SPL404 concept has developed rapidly in the Solana ecosystem, introducing the ERC404 rarity system into Solana's hybrid DeFi.
This guide will delve into the mechanics and development of NFT protocol standards, focusing on the new hybrid asset standard on the Solana chain - the SPL-404 Token standard. The introduction of the SPL-404 token standard represents a breakthrough innovation that is revolutionizing the interaction between NFTs and DeFi. This hybrid asset combines the unique characteristics of NFTs with the liquidity and fungibility of tokens, providing a transformative solution to bridge the gap between these two different asset classes.
Solana Blockchain
Solana is a high-performance public blockchain platform founded in 2017 by Anatoly Yakovenko. Compared with traditional blockchain platforms, Solana adopts a unique Proof of History (PoH) consensus algorithm, which significantly improves its transaction processing speed and throughput. Solana’s TPS can reach thousands or even tens of thousands, far exceeding traditional blockchain platforms such as Bitcoin and Ethereum.
Solana’s technical advantages are not only reflected in its efficient transaction processing capabilities, but also in its low latency and low transaction costs. These features make Solana show great potential and broad application prospects in DeFi, NFT and other blockchain applications.
What is the SPL-404 protocol standard?
Built on Solana’s Token22 protocol, the SPL-404 token standard introduces a new paradigm for digital asset representation. Unlike traditional NFTs, which represent unique digital items or artworks, SPL-404 NFTs have an intrinsic token value assigned to them. Each NFT in an SPL-404 collection is equivalent to a specific number of tokens, determined by the token economics set by the collection creator. This fusion of NFT and token properties creates a versatile asset with a wide range of applications.
This hybrid approach is not entirely new, with previous standards such as SPL-20 and SPL-22 having paved the way for it. However, SPL-404 introduces the concept of re-minting tokens, opening up avenues for gamification and speculation based on scarcity.
Each SPL-404 NFT is a unique digital asset containing a specific number of tokens that can be traded or exchanged. This feature allows NFTs to be converted into easily traded tokens and vice versa, providing significant advantages during market downturns. Simply put, SPL404 allows creators to set the properties of the intrinsic token value for each NFT: each NFT in the SPL404 collection = X tokens; NFTs can be swapped into tokens, and tokens can also be swapped into NFTs.
For collectors, SPL-404 provides greater liquidity and flexibility, making it easier to buy, sell, and trade NFTs. For investors, SPL-404 introduces exciting opportunities to decentralize ownership and earn yield through staking and other DeFi mechanisms.
Functions and features
The SPL404 token has the dual attributes of both homogeneous tokens and NFTs:
Instant liquidity: NFTs gain instant liquidity of tokens, which can be exchanged and liquidated at any time. This means that users can buy and sell SPL404 NFTs as easily as trading ordinary tokens, which improves the liquidity of the market.
Unique scarcity and appreciation potential: SPL404 tokens retain their unique scarcity and appreciation potential as NFTs. This makes each SPL404 NFT still unique and can appreciate in value based on its rarity and market demand.
Price stability: The fixed swap ratio provides a basic price indicator for the market, increasing price stability. By setting a fixed swap ratio, users can refer to this base price when trading, thereby reducing the uncertainty caused by price fluctuations.
Lower the participation threshold: SPL404 tokens lower the participation threshold of NFT. Users can gradually accumulate tokens and eventually reach the number of tokens required to redeem NFTs. This approach enables more users to participate in the NFT market and expands the audience range of the market.
Re-minting: SPL-404's unique feature is to allow re-minting, which introduces a gamification element to the traditional hybrid standard, bringing back some of the magic for NFTs through rarity speculation. Users can re-mint their NFTs and gain new properties and features, which increases interactivity and fun.
Project Example: Fluffy NFT
Fluffy consists of three parts: SOL NFT, SPL tokens, and conversion tools.
SOL NFT: Fluffys, like traditional NFTs, has collection and trading attributes, and users can buy, sell and collect these unique digital assets on the market.
SPL Token: $FLUFF is similar to Meme Coin and can be traded on the secondary market. Users can participate in the economic activities of the platform by buying, selling and trading these tokens.
Conversion tool Sniper Token Swap: $FLUFF can be converted into NFTs of different rarities at a fixed amount. The specific exchange ratio is as follows:
10000 $FLUFF = 1 Common Fluffy NFT
15000 $FLUFF = 1 Rare Fluffy NFT
20000 $FLUFF = 1 Mythic Fluffy NFT
Vice versa, NFTs of different rarities can also be converted into corresponding $FLUFF tokens at a fixed amount.
SPL-404 How to Revolutionize NFT and DeFi
First, it brings much-needed liquidity to the NFT market. By assigning a token value to each NFT, SPL-404 makes it easier to buy and sell these unique assets, even if there is no specific buyer looking for that particular item. This increased liquidity is a revolution for the NFT space, which has often been plagued by illiquidity and high barriers to entry.
Second, it fragments the ownership of NFTs. Collectors can now own a portion of a valuable NFT without having to fully purchase the entire asset. This opens the market to more participants, democratizing access to these unique digital items.
Finally, SPL-404 is pushing the boundaries of what’s possible with NFTs, introducing innovative features like generative art and re-minting. These elements of randomness and gamification add a whole new level of excitement and engagement to the NFT experience, keeping collectors and creators alike engaged. Not only is the SPL-404 NFT a unique work of art, like a traditional NFT, but it also brings the added twist of being able to “re-roll” features to unlock rare and valuable properties.
Future Development of the SPL-404 Protocol Standard
As blockchain technology continues to develop, the SPL-404 protocol standard will continue to be improved and upgraded to adapt to the changing market demands and technical environment. These improvements and upgrades may include more efficient transaction processing mechanisms, more secure permission control methods, and more diverse functions and features.
Although the SPL-404 protocol standard has many advantages, it may still face some challenges in practical applications, such as compatibility issues, technical complexity, etc. To meet these challenges, developers and the community need to strengthen cooperation and jointly promote the improvement and optimization of the standard.
in conclusion
The SPL-404 token standard represents a key advancement in the digital asset ecosystem, meeting diverse needs and preferences. With its efficient transaction processing capabilities, enhanced security, and flexible scalability, it demonstrates great application potential and development prospects.
As blockchain technology continues to advance, the SPL-404 protocol standard will further promote the development of the blockchain ecosystem and provide efficient, secure, and reliable solutions for more application scenarios. It can be expected that SPL-404 will continue to shape the future of NFT and DeFi in exciting and unexpected ways!
