> For the complete documentation index, see [llms.txt](https://docs.jutsu.world/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.jutsu.world/usdjutsu-token/generic-erc404s-explained.md).

# Generic ERC404s Explained

### ERC404 Introduction

[ERC404](#cw404-explained) tokens are an experimental token standard launched on Ethereum Mainnet in early February 2024. 

The ERC404 standard combines the fungibility of [ERC20 tokens](#cw20-recap) and the uniqueness of [ERC721 NFTs](#cw721-nft-recap), and may be treated similar to either depending on the situation.

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If you already know the basics, [skip to the Jutsu Implementation of 404 here](/usdjutsu-token/erc404s-in-jutsu-world.md).
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### ERC20 Recap

ERC20 is a specification adopted by the Ethereum Foundation for fungible tokens. 

The most notable features of an ERC20 are the following:

1. **Fungibility/Non-Unique** - i.e. one ERC20 token is perfectly exchangeable with another ERC20 token.
2. **Divisible/Fractional** - i.e. ERC20 tokens typically can be traded in factions of a token. For example, you may choose to sell/buy 0.2 of a ERC20 token.
3. **Bulk Transfers or Sale/Purchases** - i.e. ERC20 tokens typically can be traded in bulk. For example, you may choose to sell/buy 10000.02 of ERC20 tokens in a single transaction.

### ERC721 NFT Recap

ERC721 is a specification adopted by the Ethereum Foundation for NFTs. 

The most notable features of an ERC721 are the following:

1. **Non-Fungibility/Unique** - i.e. every ERC721 token is unique - one ERC721 token is different from another ERC721 token.
2. **Non-Fractional/Non-Divisible** - i.e. ERC721 tokens cannot be traded in factions. You may only trade/transfer a ERC721 as a whole.
3. **Single Transfers or Sale/Purchases** - i.e. ERC721 tokens cannot be traded in bulk and may only be traded singularly. If you intend to transfer/trade 3 ERC721s, you would have to do so in 3 different transactions.

### ERC404 Overview

ERC404 is a specification for hybrid tokens based on a hybrid of the ERC20 and ERC721 token standard, and envisions a token that combines the divisibility of ERC20 tokens and the uniqueness of ERC721 tokens. 

Here are the features of the ERC404: 

1. **Fungible *****and***** (kinda?) Unique -** One ERC404 token is perfectly exchangeable with another ERC404 token. However, if you do have a whole ERC404, that token also represents a non-fungible asset. By extension, multiple ERC404 tokens represent a collection of non-fungible assets.
2. **Fractional/Divisible** - ERC404 tokens can be traded in fractions, and you may trade/transfer any fraction of a ERC404. However, trading ERC404 tokens like so may impact the total number of non-fungible assets that the bag of ERC404 represents.
3. **Bulk Transfers or Sale/Purchases** - i.e. ERC404 tokens can be traded/transferred in bulk. You may transfer any amount of ERC404s. However, such transfers of ERC404 tokens may impact the total number of non-fungible assets that the bag of ERC404 represents
4. **Individual/Single Transfers or Sale/Purchases** - i.e. If you wanted to trade/transfer a *particular* non-fungible asset that your ERC404 collection represents, you may do so individually, and this would reduce your total holding of ERC404 by 1. If you wanted to trade/transfer three *particular* non-fungible asset, you would have to do so in 3 separate transactions.

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This describes a generic ERC404 specification, check out the [ERC404 implementation by Jutsu World here](/usdjutsu-token/erc404s-in-jutsu-world.md).
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