The 404 of "Coin Duality" and Its Implications for the Blockchain Gaming Track (Part 2)

The first part "The Insights of the 404 from 'The Duality of Token' (Part One)" has been released for almost a month. The entire 404 track has been quite sluggish due to the market adjustments, with leading projects even dropping to 5200U, and the K-line drawn resembles the "most dazzling土狗风". Conducting investment research during the low period helps to avoid being swayed by external emotions, embodying a spirit of "even if halved, what can you do to me" like Ah Q. Let's break down our thoughts into several sections:

1. Supplementary Concepts

Before we dive into a few application cases, I would like to add a few points that I recently discussed with my friends:

1. A friend mentioned that Yuliverse uses DN404, not ERC404. My own classification is that protocols of this "dual nature of coin" are uniformly categorized as "404". Therefore, whether it is ERC404, DN404, or the recently released BT404, they all use the term 404.

2. What are the differences between these protocols? As a tech novice, I simply summarized after listening to a few friends explain:

ERC404 was the first to come out, which merged the ERC721 protocol (the most classic NFT protocol) with the ERC20 protocol (the most classic token protocol) into a new protocol, with the highest Gas fees. The first application was the project known as "Dragon One," which adopted a blind box mechanism using the "treasury queue rotation" method. This means that as long as the user transfers the Token, the NFT destroyed in their wallet is placed at the end of the treasury NFT, while the newly generated NFT in their new wallet is the first one in the treasury NFT.

3. The probability of the five colored boxes in a certain project does not represent the ratio of the total number. For example, the probability of the red box is 5.86%. This does not mean that out of 10,000 NFTs, there can be at most 586 red boxes. Rather, it means that as long as players try their best to refresh and transfer among different addresses 1 ÷ 5.86% = 17 times, they should be able to draw a red box. In other words, as long as you refresh enough times, you will definitely be able to get a red box, meaning that theoretically all 10,000 NFTs can turn into red boxes.

4. DN404 and BT404

DN404 is a new protocol based on ERC404, created by the author of ERC721A. The principle of DN404 is to bridge ERC721 and ERC20, maintaining them as two separate protocols, which reduces gas fees. At the same time, it provides other developers with the freedom to define the order of blind box draws. For example, the treasury can issue new NFTs without the need for queuing; they can be first-come-first-served or randomly drawn. The first project of DN404 is ASTX, which has always been regarded by users as the second leader in the 404 track. The Yuliverse that we will introduce later is built using the DN404 protocol.

The BT404 protocol has just come out, and the key point is that it has added an NFT locking mechanism. This means that once you mint the NFT you want, you can lock it up to avoid accidentally destroying it. Additionally, they have prepared a P2P market for NFTs, where players can choose an NFT they want from the P2P market when they obtain a token, and the transaction fees from this P2P market are shared among all NFT holders proportionally. I must say, if BT404 can truly realize the above vision, it is the most suitable for blockchain games. The reason why NFTs in blockchain games have far more transaction counts than profile picture NFTs is that they are meant to be used. For example, if a warrior opens two blind boxes and both are helmets, they will need to sell one to exchange for armor.

2. Several Cases of the 404 Track

The most fun thing about WEB3 is that when a new gameplay emerges, everyone can unleash their imagination and abilities to continue evolving, constantly innovating in code and conducting social experiments. Next, let's talk about a few cases that utilized 404:

Lumiterra

Lumiterra was followed up as a key research project in Q3 of last year, and at that time, it was still a dark horse. The team's background is good, and they have ideas that will make an impact. Their approach of integrating Defi, Socialfi, and Gamefi has been well-received by institutional investors, and the investment institutions behind it are also very strong. It has now upgraded to a white horse.

Lumi launched a new set of 404-based NFTs in March, called "Lumiterra Totem 404", which is quite innovative and exciting. Since this gameplay is still in the testing phase and the code hasn't been open-sourced yet, we can only provide an introduction based on various fragmented pieces of information:

1. This should be the most innovative blockchain game we have seen so far based on the 404 concept. The team is very creative and has written their own set of contracts, looking forward to open sourcing.
2. The idea of transferring tokens between different addresses to generate new NFTs has transformed into a model where only buying and selling tokens (trading on a certain DEX) can generate new NFTs. This can increase the liquidity of the pool while also increasing the project's revenue.
3. The LEGO mechanism with NFTs has been introduced, featuring three types of NFTs: base, top, and totem. One base + one top = totem. After synthesis, 2 tokens become 1 token, which seems like a "forced halving" of assets, but don't forget this is a blockchain game. If the income from the totem in the game exceeds the value of the disappearing token, then it's a profit. This model of forced deflation can stimulate the competition between players and the project parties.
4. The circulation mechanism of NFTs is different from the treasury queuing mechanism of other projects. Lumi adopts a "stack" mechanism, which means that the NFTs that are destroyed first will be at the forefront of minting. Of course, this will also result in the sunk NFTs being unable to be MINTed. During the testing period, the project team made an adjustment to this mechanism.

Players who were fortunate enough to MINT the Totem NFT in March have already seen a 2-3 times increase so far. At the same time, Lumi will begin its second testing on April 17, and it is said that the 404 type monster NFT will also be launched soon, along with a new swap mechanism.

Yuliverse

Yuliverse is a WEB3 social + location-based game that has been active for over two years, which can be understood as the Pokemon Go of WEB3.

The team also took the lead in trying out the 404 asset gameplay, launching the OG 404 asset in mid-March, with a total of 1000 units, of which 300 were reserved for Yuli's original OG users, 200 were used for the liquidity pool, and 500 were publicly released through a whitelist.

Compared to the more complex totem 404 gameplay of Lumiterra, the OG404 asset of Yuliverse is relatively simple. The project is based on the DN404 protocol, without complicated rarity and NFT synthesis splicing, and simply serves as a carrier for the OG Pass, adding a coin swapping gameplay.

According to the official introduction, OG404, as the highest identity in the Yuliverse ecosystem, has the strongest rights and interests, including the airdrop of the token $ART, resource advantages in the game, ERC ecosystem Defi Staking, and so on. Although the details have not yet been announced, early players who entered the mint through the white list (mint price 0.2E) have already earned around 3 times (the current NFT price is about 0.6E).

The reason for choosing DN404 instead of ERC404, based on discussions with the project team, is primarily due to two considerations: first, compared to ERC404, DN404 can save approximately 50% in Gas Fees due to its underlying architectural advantages; second, the project team behind DN404 is more proactive and comprehensive in their support for projects adopting the DN404 standard, both technically and within the community.

Overall, Yuliverse's layout in the 404 track is relatively simple and does not delve deeply into the gameplay mechanics of 404. It is merely a preliminary attempt to issue a new type of asset, aimed at rewarding loyal users who participated early in the OG and game ecosystem. With the mutual empowerment between 404 assets and the Yuliverse game ecosystem, there is more room for imagination compared to other isolated 404 projects that are currently running alone.

BinaryX

Having fully experienced the last wave of bull and bear markets, BinaryX (BNX) has always been an active participant in the blockchain gaming scene. Recently, BNX launched a new game, Project Matthew, in March this year, leveraging the hype around 404. This game is built on the BNB chain ( BSC ) and has released the 404 token MB4, which comes with gaming utilities.

A brief introduction to Project Matthew:

1. It is built on the 404 standard.
2. Determine the different IGO quotas of MB4 that investors can purchase based on the number of BNX coin holders.
3. A total of 40,000 404 Token MB4 were issued, of which 90% are available for players to mint, and 10% are used for initial liquidity, with an issuance price of 0.05 BNB.
4. 404 NFT distributes airdrops with different weights based on the rarity of the generated NFT, but surprisingly, it does not provide any empowerment in the game.
5. By burning different amounts of 404 Token MP4, players can obtain the premium asset Land of Project Matthew (the lower-tier asset land can be obtained by consuming BNX), thereby participating in Play to Earn and earning the game token MC.

Overall, the ordinary assets of the new game are exchanged using BNX tokens (designed to achieve the purpose of consuming the main token BNX). The IGO of the 404 tokens also used the soft staking approach with BNX tokens, empowering the BNX tokens significantly. Therefore, the purpose of the game Project Matthew is to provide a consumption use for the main token BNX, similar to how Gashero provides consumption scenarios for the main coin GMT of StepN.

The addition of 404 assets in the Matthew game feels somewhat abrupt. We speculate that the Matthew game was almost ready, and it coincidentally caught the hype of 404 at the end of February, leading to the forced inclusion of a 404 concept. Therefore, Matthew's 404 is a direct copy of open-source code from other projects, with no innovative modifications. Even the gameplay closest to 404, the "blind box" mechanic, merely enabled airdrops at different levels, and surprisingly, there was no gameplay empowerment, which leaves people puzzled.

Therefore, overall, the release of the 404 token MB4 by BinaryX did not innovate at the protocol level, but rather added new games at the application level for empowerment and a series of nested applications, which is what BNX, an old player in the blockchain gaming space, is best at. After all, players spent real money to buy the 404 token MB4, and also consumed MB4 to acquire high-level assets in the game.

As long as one dares to introduce innovation, it is a good thing.

3. Can the 404 track take off?

Finally, let's summarize a bit. **404 is the only innovation we've felt can shine a little in this round of the bull market. At least it incorporates gameplay into the protocol and can smoothly integrate into the game economy system. These, combined with some characteristics analyzed in the first part of this article, still leave us optimistic about the future of 404.