The recent protocol frenzy driven by ERC314 is gradually spreading to various chains. This article will introduce the design principles and development process of the 314 protocol, as well as the related tokens under this concept.
Table of Contents:
Origin of the 314 Protocol: A New Protocol Born from a Social Experiment
The Hottest 314 Tokens at the Moment
X314: Around $3.8
LONG-314: Around $0.25
BNB314: Around $0.09
Y314: Around $0.04
BTC314: Around $0.04
DAPJ: $0.000048
Is the 314 Protocol a Technological Innovation or a Flash in the Pan?
Conclusion
The 314 protocol frenzy, driven by ERC-314, is gradually spreading to various chains. The previous protocol standard that attracted so much attention may still be the ERC-404 protocol led by Pandora. Looking back further, the recent hype even reminded many people of the previous NFT craze led by ERC-721.
On the BSC chain, X314 has achieved a thousand-fold increase in just two weeks since its launch on March 27th (starting price of $0.00349, current price around $4.2, with a peak of over $5.3). Various 314 protocol tokens with Meme prefixes have attracted the attention of many traders on the Ave.ai one-stop chain trading platform, with an increase of more than 30%.
Given the hot performance of the 314 protocol, Odaily will lead everyone to get to know this new protocol standard that claims to “eliminate the fate of intermediaries such as DEX.”
Note: Currently, the 314 protocol is only a commonly used term, referring to the contract standard used for buying and selling tokens through contracts, and it is not endorsed by any official organization. Odaily reminds users that new project market fluctuations are large, and investment risks are extremely high. Please pay attention to asset security and choose investment targets cautiously.
Origin of the 314 Protocol: A New Protocol Born from a Social Experiment
So where does the 314 protocol originate? To talk about this, we need to go back about three weeks to that Wednesday.
On the evening of March 20, 2024, the ERC314 protocol token SIMP went live. Prior to this, the project raised 20 ETH, with a total token supply of one million, and distributed it according to a ratio of 45% for LP, 45% for seed round pre-sale participants, and 10% for multi-signature CEX wallet.
The innovation of this project lies in the fact that users can directly transfer ETH to its contract to complete token purchases and transfer tokens to its contract for selling, with gas costs much lower than DEX swap transactions. The project’s official whitepaper provides a detailed explanation and introduction to the ERC314 protocol, and mentions that any project can deploy ERC314 protocol tokens.
After that, SIMP skyrocketed from its low point to over $50 in just a few hours.
On March 21st, the official account @Simplify_ERC314 of the ERC314 protocol emphasized in a post on X platform that the project is a social experiment. Subsequently, some community members gave feedback that there were issues with the contract formula of the protocol, and the LP owner’s permissions were not truly transferred. Many people experienced sandwich attacks and increased transaction losses during the buying and selling process. Although professional smart contract engineers later explained the contract formula xy=k, the SIMP token still fell under fud sentiment, dropping to around $6 in less than a day, a decrease of nearly 90% from the high point, and dropping to around $0.08 with the passage of time. At the time of writing, influenced by the 314 protocol market sentiment, the SIMP token has risen to around $0.5.
The innovation of the ERC314 protocol, which was expected to eliminate intermediaries such as DEX, reduce transaction operation costs, and to some extent prevent MEV attacks, came to an abrupt end. However, the new 314 protocol inspired and drove by it was already on its way:
On March 22nd, the LONG314 token deployed on the BSC chain went live, allowing users to directly interact with the contract address by transferring BNB to achieve token trading.
On March 26th, the project officially announced plans to upgrade the protocol with expansion modules to optimize the shortcomings of ERC314 and LONG314. It will later incorporate sales cooldown mechanisms and LP burning mechanisms to prevent bot attacks and promote token price increases.
On March 27th, the X314 protocol token deployed on the BSC chain went live.
On March 29th, X314 started a staking lottery activity, upgrading the contract to a 60-second transaction cooldown and burning 6% LP automatically within 24 hours, destroying more than one million X314 tokens daily.
On April 1st, the official BSCNews account released a sponsored tweet promoting the X314 project.
On April 2nd, the price of X314 tokens soared, attracting attention to on-chain data.
On April 6th, Ave.ai launched the X314 section and added a promotion for the X314 Telegram community in the banner position on the homepage.
On April 7th, the price of X314 tokens surpassed $1.
On April 8th, the price of X314 tokens continued to rise, reaching over $5.3 at one point. At the time of writing, the price of X314 has fallen back to around $3.8.
Driven by the X314 protocol and the rising price of its tokens, the trading volume of many projects in the X314 section on the Ave.ai platform has skyrocketed, and buying and selling activities are very active.
The Hottest 314 Tokens at the Moment
Here are some of the active and high market value 314 protocol-related token projects at the moment, with data primarily sourced from Ave.ai.
X314: Around $3.8
Total token supply: 21 million;
Contract permissions: Temporarily not relinquished (official explanation is that the contract is still being continuously updated and needs to be repaired and optimized for issues);
Market capitalization: Around $33 million;
Total liquidity pool: Around $1.8 million.
As the leading token in the X314 section at the moment, X314 can be considered the “culmination” of the protocol:
– It has made certain innovative inheritances from ERC314 and LONG314.
– The LongSwap platform provides a smooth swap trading experience.
– It has innovative sales cooldown mechanisms and LP burning mechanisms.
– It has a 90-day staking incentive activity.
– It has community user incentive lottery activities, etc.
Thanks to its recent market performance and operational activities, the X314 Telegram community has gathered over 13,000 members, and community communication is relatively active. It is worth mentioning that the X314 official account has attracted the attention of CZ, but it is uncertain whether the account was purchased.
LONG-314: Around $0.25
Total token supply: 21 million;
Market capitalization: Around $6.18 million;
Total liquidity pool: Around $360,000.
LONG314 is a token issued based on ERC314 and is issued by the X314 project. The X314 official account has previously released relevant tweets, and the token is linked to the 314 protocol swap platform LongSwap.
BNB314: Around $0.09
Total token supply: 20.23 million;
Market capitalization: Around $2.08 million;
Total liquidity pool: Around $250,000.
BNB314 went live on April 6th. The project claims to be jointly initiated by BNB whales and promotes common communities. It is consistent with X314 in terms of buying and selling operations, transaction cooldown mechanisms, and prevention of sandwich attacks. However, the LP deflation rate is 12% per day.
Y314: Around $0.04
Total token supply: 20.4 million;
Market capitalization: Around $900,000;
Total liquidity pool: Around $130,000.
Y314 went live on April 6th and is marketed as the “first 314 protocol chromosome concept token.” It can be seen that this is a project that purely rides on X314. Please be sure to pay attention to the risks.
BTC314: Around $0.04
Total token supply: 17.8 million;
Market capitalization: Around $720,000;
Total liquidity pool: Around $130,000.
BTC314 went live on April 5th. Similar to other 314 protocol tokens, the only difference is that the LP automatic burning rate within 24 hours is only 2%.
DAPJ: $0.000048
Total token supply: 6.6 billion;
Market capitalization: Around $320,000;
Total liquidity pool: Around $90,000.
DAPJ went live on April 7th. Unlike other 314 protocol tokens, it was launched on the Base chain and focuses on the Meme concept.
Is the 314 Protocol a Technological Innovation or a Flash in the Pan?
Previously, when SIMP first went live, the ERC314 protocol sparked a lively discussion. Here are some selected excerpts:
As early as March 19th, the EV Terminal platform on the chain previously made a detailed explanation of ERC314 and SIMP on X platform, stating that “the ERC314 standard will change the way tokens are purchased and effectively reduce gas costs on Ethereum,” and recently, EV Terminal also announced on its official Twitter that SageERC314 has acquired the previous SIMP issuing project Simplify and will integrate SIMP with SAGE.
When SIMP first went live, crypto KOL @0xSunNFT believed that the core concept of ERC314 is to optimize token transaction gas costs, allowing token purchases to be completed with just one transfer. And the restriction of only one transaction per block per address prevents sandwich attacks. It can be considered an innovation that “can catch people’s attention.”
AC Capital founder and Open_Rug host CryptoV sees ERC314 as the “latest progress of Ponzi on Token,” directly realizing “Token as an L2” and “Uniswap on Token,” replacing the functions of L2 and DEX, to some extent even surpassing “Pandora that negates NFTX” (referring to the project that introduced the concept of ERC404).
Crypto researcher Haotian conducted a simple review of SIMP and the “failure” of the ERC314 protocol, suggesting that, first, “ERC-314, like ERC20 and other token standards, can be considered a new standard, but its innovation has been ‘overhyped.'”
Second, “ERC314 adopts a ‘black box’ pricing mechanism, which reduces the slippage and high gas fee problems of real-time swap calculation prices through this predefined and somewhat centralized way. The downside is that the ‘black box’ logic setting inside the contract requires trust from users, and whether the contract issuer acts maliciously is also a critical issue.”
Finally, “ERC314 has made some ‘micro-adjustments’ to the commonly used transaction regularization, adding a ‘pre-processing’ or ‘black box’ operational logic to the contract pricing mechanism and token ‘buying and selling’ methods. I am more inclined to think that this is a form of intent-based transaction regularization, which is particularly suitable for the circulation of some small MEME coins through private placement. Due to the involvement of relatively complex contract logic and possible centralized trust issues, it is difficult for it to become a circulation method for mainstream large-scale assets.”
Overall, Haotian believes that ERC314 is a niche micro-innovation play, more suitable for the usage scenario of “niche hype of Meme,” and is difficult to be accepted by the mainstream market.
The recent frenzy of the 314 protocol driven by X314 is seen by more people as a short-term speculative target. Most people mention the advantages of the project and this type of project, such as “no transaction fees, relatively low market value, CZ’s attention, backing from platforms, and staking.” They have spread with the style of promoting large armies. Therefore, the future market performance of the 314 section, represented by X314, still has a high degree of uncertainty.
Conclusion
In general, X314 has made certain innovations based on ERC314, and the transaction cooldown mechanism and LP burning mechanism have alleviated the intensity of on-chain PVP to a certain extent, thus avoiding the pitfalls that SIMP once encountered. It has brought new branches to the BSC chain ecosystem. However, due to the extremely strong liquidity, the frictional cost of buying and selling transactions has been minimized, making it difficult to avoid price fluctuations and market value fluctuations in the short term.
In addition, the control of contract permissions by the project team is also a potential hidden danger for this type of project. Therefore, participating in such projects carries high risks, and the subsequent development and token trends of the projects largely depend on the scope and operations of the project team.
Therefore, it is difficult for the 314 protocol to become as widely used as standard protocols like ERC721 in a short period of time. But we have reason to believe that mechanisms that can accelerate the liquidity and circulation efficiency of funds and enhance decentralized token trading will continue to develop in more chain ecosystems, and in certain races and fields, they will complement DEX and other trading channels.
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