A novel token standard, SPL-404, is gaining attention on Solana for its ability to integrate NFTs and DeFi.
This approach combines the distinct qualities of NFTs with the liquidity and fungibility of traditional tokens, creating a unique hybrid asset.
This token standard allows swapping of NFTs into 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 mint NFTs with an intrinsic token value.
Traditional NFTs represent unique digital items, such as artwork, collectibles, or in-game assets and are typically less liquid than fungible tokens because each asset 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 can vary based on factors such as rarity, demand, or the tokenomics defined by the creators of a given collection.
As a result, this token standard provides more flexibility in trading and accessing liquidity.
Source: Gogonauts, Mall Street, Fluffys, The DelinquentsHow does SPL-404 Combines DeFi and NFTs?
SPL-404 combines DeFi and NFTs by enabling NFT assets to be more like traditional tokens.
- Ease of Trading: If each NFT has a built-in token value, it’s easier to buy and sell. You don’t have to hunt for a specific buyer—just find someone who wants the tokens worth.
- Accessibility: SPL-404 can lower the cost of getting into NFTs; instead of buying a single expensive piece, you can get in at a level that suits your budget.
- Flexible Use Cases: This new standard opens up some possibilities. For example, in a game, an SPL-404 NFT might be an in-game item with a token value, making it easier to trade or sell when you’re done with it.
What are current SPL-404 Projects?
Several projects on Solana are already adopting 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:
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*All investment/financial opinions expressed by NFT Plazas are from the personal research and experience of our site moderators and are intended as educational material only. Individuals are required to fully research any product prior to making any kind of investment.
