A new token standard, SPL-404, is gaining attention on Solana for its ability to integrate NFTs and DeFi.
This approach combines the distinctive qualities of NFTs with the liquidity and fungibility of traditional tokens, creating a unique hybrid asset.
This token standard allows for the exchange of NFTs into a certain number of tokens, and vice versa.
What is SPL-404 Token Standard?
Think of SPL-404 as a hybrid token: it uses Solana’s Token22 standard to create NFTs with an intrinsic token value.
Traditional NFTs represent unique digital items, such as works of art, collectibles or in-game items, and are typically less liquid than fungible tokens because each item is unique. SPL-404 changes this by allowing NFTs to have an intrinsic token value, effectively assigning each NFT a certain number of underlying tokens.
This value may vary based on factors such as rarity, demand, or the tokenomics defined by the creators of a particular collection.
As a result, this token standard offers greater flexibility in trading and accessing liquidity.
Source: Gogonauts, Mall Street, Fluffys, The DelinquentsHow does SPL-404 combine DeFi and NFTs?
SPL-404 combines DeFi and NFTs by making NFT assets more similar to traditional tokens.
- Ease of trading: If each NFT has a built-in token value, it is easier to buy and sell. You don’t have to look for a specific buyer; just find someone who wants the tokens worth.
- Accessibility: SPL-404 can reduce the cost of participating in NFTs; instead of buying one expensive piece, you can get in at a level that suits your budget.
- Flexible usage scenarios: This new standard opens up some possibilities. For example, in a game, an SPL-404 NFT could be an in-game item with a symbolic value, making it easier to trade or sell once you’re done with it.
What are current SPL-404 projects?
Several projects on Solana already use the SPL-404 standard.
These projects leverage the hybrid nature of SPL-404 to offer unique digital assets with more liquidity than traditional NFTs. Here are some examples:
Want more? Connect with NFT Plazas
Sign up for the weekly newsletter
Join our Telegram
follow us on twitter
Like us on Facebook
Follow us on Instagram
*All investment/financial opinions expressed by NFT Plazas are from the personal research and experience of our site moderators and are intended as educational materials only. Individuals are required to fully research any product before making any form of investment.