Are 404s and Hybrid NFTs Ready to Rip?

TL;DR
The ERC-404 and SPL-404 token standards, on Ethereum and Solana, respectively, enable hybrid NFTs which combine fungible and non-fungible characteristics, introducing the built-in fractionalization of NFTs. After being pioneered by Pandora earlier this year, there is now renewed interest in this kind of token, with projects and platforms including Dune404, Gogonauts, Mutant Labs and Hakoiri leading the way, and in some cases crossing over into Web3 gaming.

If you’re following NFTs you might remember that earlier this year a new token standard called ERC-404 triggered a mini-burst of hype around the idea of hybrid NFTs. Since then, the protocol faded into the background a little as other narratives emerged, but there have been some new developments lately to suggest that 404 tokens and hybrid NFTs–operating on both Ethereum and Solana–are generating renewed interest, so let’s get a quick refresher on what 404s actually do differently, and on what’s been happening recently around hybrid NFTs.

Pandora and ERC-404s

As covered here back in February, a project called Pandora first pioneered ERC-404 tokens. The point of the token, which is on Ethereum, was to bridge the gap between NFTs and regular crypto, as it enables NFTs with built-in fractionalization, meaning you can hold whole NFTs, or you can trade memecoin-like fungible tokens that represent parts of a whole NFT.

Ideally, this should introduce increased liquidity when it comes to trading, and allow for greater flexibility when it comes to deciding how much exposure you want to have to a project, while at the same time retaining the unique collectability and art aspects of NFTs.

Pandora proved that the concept can work, and has remained busy since it first appeared, with this month bringing the beta version launch of its new ERC-404 token launchpad.

SPL-404s on Solana

In addition to ERC-404s, we also subsequently saw the introduction of SPL-404 tokens. As you might guess from the label, these are exactly like ERC-404s, except that they operate on Solana rather than on Ethereum, which–considering that Solana had a very active NFT scene in the last cycle, and is all about memecoins right now, seems like it should, potentially, be a good fit.

Top Hybrid NFT Projects and Platforms

We’ve already mentioned Pandora, which, as the first ERC-404 project, remains central, and in addition to that, let’s pick up on some 404-utilizing projects that have come later, and which have the potential to push hybrid NFTs forward from here.

Dune404

A project that has this month helped bring attention back to the potential of 404 tokens is Dune404. Although NFTs have been subdued this year, this drop has been picking up a reasonable amount of attention, due partly to being backed by both Animoca Brands and the above-mentioned Pandora.

It also benefits from launching on the Coinbase-developed Ethereum Layer-2 Base (making it the first project on Base to use the ERC-404 standard), which is surging at the moment in terms of volume and new users, and is at the center of Coinbase’s Onchain Summer event, and this is all while Coinbase’s new Smart Wallet shows real potential as a frictionless way of onboarding new crypto users. That all leaves Dune404 in a strong position to become a key NFT project in the Base ecosystem, and possibly showcase the benefits of 404 tokens.

Gogonauts

Cooking for a while, Gogonauts is an SPL-404 PFP project, meaning it’s working on hybrid NFTs and a token called NAUT, but all on Solana rather than Ethereum, and it’s an especially notable project because it’s being developed by the team behind Web3 entertainment platform Rove World.

Gogonauts has been posting messages recently about an incoming 404 Summer, while teasing “a new way to mint … pioneered by Gogonauts”, along with releasing some of the project’s artwork. Overall, it will be interesting to see where this one is heading as it seems focused on pushing the benefits of SPL-404s over regular NFTs, and also, it’s working with Mutant Labs (which is a key player and the team behind several other hybrid projects, as detailed below), although without firmer details Gogonauts still remains difficult to assess.

Mutant Labs

Also working on Solana, SPL-404 pioneer Mutant Labs has become a hub at the center of the (admittedly still niche) SPL-404 ecosystem.

As mentioned, Mutant Labs is working with Gogonauts, and is also closely associated with four other hybrid projects, including Lambo Space Princess (which combines PFPs and meme tokens), Mall Street (a PFP project utilizing NFTs that fractionalize into the MALL token), and a project called Abble, which started out as a memecoin before expanding to release a PFP collection that revealed this week. However, the leading Mutant Labs project is Mutantmon, which has just announced a partnership with Web3 gaming platform StadiaX to work on a new title called Mutantmon: Tactics.

Hakoiri

Another development bringing together SPL-404s and the potential of Web3 gaming, is a project called Hakoiri, which is being supported by Mutant Labs and is listed on Steam, where there are details of an early access version of the game to become available soon.

With plans to launch its NFTs through Magic Eden, Hakoiri is a Japanese-themed open-world battler, and although it still appears to be early in development, and it’s unclear exactly how SPL-404s will fit into the game’s mechanics, this looks like one to keep tabs on as it builds.