Your Only Guide to Palette
01. What is Palette?
02. What is ERC 404?
03. What makes ERC 404 special?
04. How does the tech work?
05. ELI5?
06. Where/How can I trade Palette?
07. What happens if I want to liquidate a % of Palette?
08. “Utility”
01. What is Palette?
Palette is a collection of 6,969 generative artworks minted on the Ethereum blockchain using the latest ERC 404 v2 token standard.
02. What is ERC 404?
ERC 404 is a revolutionary token standard created & launched by Pandora Labs. Pandora is the first collection launched using this standard & acts as a proof of concept.
Palette is the first art collection on the ERC 404 v2 standard.
Here’s the changelog for v2
03. What makes ERC 404 special?
As explained by the people at Pandora Labs,
With ERC 404, there is a mixed ERC20 / ERC721 implementation with native liquidity and fractionalization. While these two standards are not designed to be mixed, this implementation strives to do so in as robust a manner as possible while minimizing tradeoffs.
In short, Palette is both an art project (ERC721) & a tradeable token project (ERC20)
04. How does the tech work?
ERC 404 makes trading digital art more flexible. You can trade art in two ways: as whole NFT artworks on marketplaces, or in pieces, like coins, on decentralized exchanges. When you trade fractions of an artwork, the NFT gets burned, disappearing until you collect enough tokens to make a whole again, which then mints a new NFT. So, whether you’re buying or selling parts of the art or the whole thing, you’re essentially trading tokens that represent the artwork. This way, buying more tokens to complete a whole, or selling parts of it, directly affects whether the NFT exists or not.
05. ELI5?
0.1 palette = no NFT
0.2 palette = no NFT
0.3 palette = no NFT
0.9 palette = no NFT
1 palette = 1 NFT
similarly,
1 palette = 1 NFT
1.5 palette = 1 NFT
2.2 palette = 2 NFT
so on.
06. Where/How can I trade Palette?
Upon launch, artworks as ERC721 can be traded on various NFT marketplaces, including popular platforms like OpenSea, Blur, and others. For trading it as ERC20 coins, decentralized exchanges (DEXs) such as Uniswap offer a seamless experience. This flexibility allows collectors and traders to navigate between the art and coin aspects of their investments across a wide range of platforms.
07. What happens if I want to liquidate a % of Palette?
You would trade the corresponding fraction of your Palette tokens on decentralized exchanges (DEXs) like Uniswap. This involves selling a portion of your tokens as ERC20s in the open market. As you sell these fractions, the NFT associated with your Palette tokens will be burned if it results in you holding less than a complete token. If you later decide to reacquire tokens to reach a whole number, a new NFT will be minted, restoring your ownership of the artwork in its NFT form.
Keep in mind: engaging in fractional trades might result in burning a Palette Artwork, especially one with your favorite rarity or aesthetic. To safeguard your favorites, consider transferring them to a separate wallet before trading tokens. This step ensures your prized artwork remains untouched and preserved.
08. Utility?
Art is the Utility
To better explain, Palette’s utility lies in its pioneering exploration of Pandora’s ERC 404 standard, marking it as the first project to fully harness this innovation. By venturing into uncharted territory, Palette sets a new benchmark for artistic and technical excellence, offering collectors a unique blend of artistry and blockchain innovation.
