In two weeks, the increase is over a thousand times. Is the 314 agreement a technological innovation or a popular hype?
Is the 314 protocol going to be the next ERC-721?Author: Wenser, Odaily Planet Daily
The wave of the 314 protocol driven by ERC314 is gradually spreading across various chains. The last protocol standard that attracted so much attention might have been the ERC404 protocol led by Pandora. Looking further back, the recent phenomenon has even reminded many of the NFT boom led by ERC721.
On the BSC chain, X314 has achieved over a thousand times increase in just two weeks since its launch on March 27 (launch price $0.00349, as of the time of writing, the price is around $4.2, with a peak exceeding $5.3). Various tokens with the Meme prefix have also attracted many traders' attention in the X314 section of the one-stop on-chain trading platform Ave.ai, with increases often exceeding 30%.
In light of the hot performance of the 314 protocol, Odaily Planet Daily will guide everyone to understand this new protocol standard that claims to "revolutionize the lives of intermediaries like DEX" (Note: Currently, the 314 protocol is only a colloquial term, generally referring to the contract standard used for tokens that can achieve buy and sell transactions through contract transfers. There is no official organization endorsement. Odaily reminds users that new projects have high volatility and investment risks, so please pay attention to asset safety and choose investment targets cautiously).
Origin of the 314 Protocol: A New Type of Protocol Born from a Social Experiment
https://app.simplifyerc.com/
So, where did the 314 protocol actually originate?
To answer this, we need to rewind time to about three weeks ago on a Wednesday.
On the evening of March 20, 2024, the ERC314 protocol token SIMP was launched. Prior to this, the project raised 20 ETH, with a total token supply of 1 million, distributed as 45% for LP, 45% for seed round presale participants, and 10% for a multi-signature CEX wallet. The innovation of this project lies in that users can directly transfer ETH to its contract to complete token purchases and transfer tokens to its contract to sell, with gas costs far lower than DEX swap transactions. The project's official white paper provides a detailed explanation and introduction to the ERC314 protocol, mentioning that any project party can deploy ERC314 protocol tokens.
Comparison of ERC-20 VS ERC-314
Subsequently, SIMP skyrocketed from its low point to over $50 by the early morning of the next day, with an increase of over a hundred times.
On March 21, the official account of the ERC314 protocol @Simplify_ERC314 (which has since been deactivated) posted on the X platform emphasizing that the project is a social experiment. Soon after, community members reported that there were issues with the protocol contract formula, and the LP Owner rights of the liquidity pool had not been genuinely transferred. Many experienced sandwich attacks during buying and selling, leading to increased trading losses. Although professional smart contract engineers later explained the contract formula xy=k part, the SIMP token still fell amidst FUD, dropping to around $6 in less than a day, nearly a 90% decrease from its peak, and at one point approaching zero, with the price falling to around $0.08. As of the time of writing, the SIMP token has risen to around $0.5, influenced by the market sentiment of the 314 protocol.
Originally expected to eliminate intermediaries like DEX, save transaction costs, and to some extent prevent MEV attacks, the innovation of the ERC314 protocol came to a halt. However, the new 314 protocol inspired and driven by this has already begun its journey.
- On March 22, the LONG314 token deployed on the BSC chain was launched, allowing users to directly interact with the contract address to buy and sell tokens by transferring BNB.
- On March 26, the project officially announced plans to expand and upgrade the protocol to optimize the deficiencies of ERC314 and LONG314, with plans to introduce a sales cooling mechanism and LP burning mechanism to avoid bot attacks and promote token price increases.
- On March 27, the X314 protocol token was launched on the BSC chain.
- On March 29, X314 launched a staking lottery event, upgrading the contract to a 60s trading cooldown, automatically burning 6% LP every 24 hours, and destroying over 1 million X314 tokens daily.
- On April 1, the official account of BSCNews published a sponsored tweet promoting the X314 project.
- On April 2, the price of X314 token surged, attracting attention from on-chain data.
- On April 6, Ave.ai launched the X314 section and added a promotion position for the X314 Telegram community on the homepage banner.
- On April 7, the price of X314 token broke through $1.
- On April 8, the price of X314 token continued to rise, once exceeding $5.3. As of the time of writing, the price has retreated to around $3.8.
Driven by the rise of the X314 protocol and token, the trading volume of many projects in the X314 section on the Ave.ai platform has surged, with trading activities being extremely active.
The Hottest 314 Tokens Right Now
The following are currently active and have higher market capitalization and liquidity related to the 314 protocol, with data primarily sourced from Ave.ai (Note: Odaily Planet Daily is only sharing for communication and does not endorse any projects. Users must DYOR, pay attention to asset safety, and choose investment targets cautiously).
X314: Around $3.8
Total token supply: 21 million;
Contract permissions: Not yet relinquished (official explanation is that the contract is still being updated and needs to address issues);
Circulating market cap: Approximately $33 million;
Total LP liquidity: Approximately $1.8 million.
As the leading token in the X314 section, X314 can be considered the "culmination" of this protocol------
- Inherited and innovated to a certain extent from ERC314 and LONG314
- LongSwap platform provides a smooth swap trading experience
- Has a certain pioneering sales cooling mechanism and LP burning mechanism
- A staking incentive activity lasting 90 days
- Community user incentive lottery activities and other operations
Thanks to recent market performance and operational activities, the X314 Telegram community has gathered over 13,000 members, with active community exchanges. Notably, the X314 official account has attracted CZ's attention, though it is uncertain whether this account is a purchasing account.
LONG-314: Around $0.25
Total token supply: 21 million;
Circulating market cap: Approximately $6.18 million;
Total LP liquidity: Approximately $360,000.
LONG314 is a token issued based on ERC314, launched by the X314 project. The X314 official account previously released related tweets, and this token is linked to the 314 protocol swap platform LongSwap.
BNB314: Around $0.09
Total token supply: 20.23 million;
Circulating market cap: Approximately $2.08 million;
Total LP liquidity: Approximately $250,000.
BNB314 was launched on April 6, with the project team stating it was initiated in collaboration with BNB whale communities. It shares similarities with X314 in trading operations, trading cooldown mechanisms, and preventing sandwich attacks, but the LP deflation rate is 12% per day.
Y314: Around $0.04
Total token supply: 20.4 million;
Circulating market cap: Approximately $900,000;
Total LP liquidity: Approximately $130,000.
Y314 was launched on April 6, marketed as "the first 314 protocol chromosome concept coin." It is evident that this is a project purely riding on the coattails of X314, so please be cautious of the risks.
BTC314: Around $0.04
Total token supply: 17.8 million;
Circulating market cap: Approximately $720,000;
Total LP liquidity: Approximately $130,000.
BTC314 was launched on April 5, similar to other 314 protocol tokens, with the only difference being that the 24-hour automatic LP burning rate is only 2%.
DAPJ: $0.000048
Total token supply: 6.6 billion;
Circulating market cap: Approximately $320,000;
Total LP liquidity: Approximately $90,000.
DAPJ was launched on April 7, differing from the above 314 protocol tokens, issued on the Base chain, and primarily focuses on the meme concept.
314 Protocol: Technological Innovation or a Flash in the Pan?
Previously, when SIMP was first launched, the ERC314 protocol sparked a heated discussion. Here are some excerpts:
As early as March 19, the on-chain platform EV Terminal had posted on the X platform providing a detailed explanation of ERC314 and SIMP, stating that "the ERC314 standard will change the way tokens are purchased and effectively reduce gas fee costs on Ethereum." Recently, EV Terminal also announced on their official Twitter that SageERC314 had acquired the previous SIMP issuing project Simplify and would begin integrating SIMP with SAGE.
When SIMP first hit the market, crypto KOL @0xSunNFT believed that "the core concept of ERC314 is to optimize gas for token trading, allowing buying and selling to be completed with just one transfer," and that "the restriction of only one transaction per block and address prevents sandwich attacks," which is relatively innovative and "can be considered a project that is eye-catching."
AC Capital founder and Open_Rug manager CryptoV viewed ERC314 as "the latest advancement in Ponzi on Token," directly achieving "Token as an L2" and "Uniswap on Token," replacing the functions of L2 and DEX. To some extent, it accomplished what "Facetswap wanted to do but failed," and its level is even higher than "the denial of NFTX's Pandora" (referring to the project that introduced the ERC404 concept).
Crypto researcher Haotian provided a brief retrospective summary of the "failure" of SIMP and the ERC314 protocol. He believes that, firstly, "ERC-314, like ERC20 and other token standards, can be considered a new standard, but its innovativeness has been 'overrated.'"
Secondly, "ERC314 adopts a 'black box' pricing mechanism, which reduces the slippage and high gas fee issues present in real-time swap price calculations through this predefined and somewhat centralized method. The downside is that this 'black box' logic set within the contract requires user trust, and whether the contract publisher will act maliciously is a key issue."
Finally, "ERC314 makes some 'micro-adjustments' to the previously common trading paradigm, adding a kind of 'pre-processing' or 'black box' operational logic to the contract pricing mechanism and the token 'buy and sell' method. I tend to think of this as an intent trading paradigm, particularly suitable for some small MEME tokens using private placement for circulation. Due to the complex contract logic involved and possible centralized trust issues, it is difficult to become a mainstream circulation method for large-scale assets."
Overall, Haotian believes that ERC314 is a niche micro-innovation play, more suitable for "niche meme speculation" scenarios, and is unlikely to be accepted by the mainstream market.
Recently, the 314 protocol wave driven by X314 has been viewed by more people as a short-term speculative target, with most mentioning that the project and similar types of projects are promoted for their "no trading fees, relatively low market cap, CZ attention, backing from platforms, and staking" advantages, reminiscent of a grassroots marketing army. Therefore, the future market performance of the 314 sector, represented by X314, remains highly uncertain.
Conclusion
In summary, X314 has made certain innovations based on ERC314, and the trading cooldown mechanism and LP burning mechanism have somewhat alleviated the intensity of on-chain PVP, thus avoiding the "pitfalls" of SIMP. The BSC chain ecosystem has sprouted new branches, but due to extremely strong liquidity, the friction costs of buying and selling transactions have been minimized, making it difficult to avoid short-term price fluctuations and market cap changes.
Additionally, the project team's control over contract permissions is also a potential hidden danger for this type of project. Therefore, participating in such projects carries high risks, and the subsequent development of the project and token trends largely depend on the project's team and operations.
Thus, the 314 protocol is unlikely to become a widely adopted standard like ERC 721 in the short term. However, we have reason to believe that mechanisms that can accelerate the efficiency of capital liquidity and enhance decentralized trading of tokens will develop towards more on-chain ecosystems, forming a certain complement to trading channels like DEX in some tracks and fields.
