Why Hybrid NFTs Are Kind of A Big Deal

SPL-404 is the new big thing. Here’s what to expect.

Hybrid Theory

As NFTs continue to evolve in the ever changing landscape of the Solana ecosystem, it should come as no surprise to you that everyone and their mother on the timeline is talking about SPL-404.

But… What is SPL-404 exactly, and why should you care? 

In summary, SPL-404 (innovated by Mutantmon and inspired by Ethereum’s ERC-404 token standard) is the first generative Hybrid Token standard on Solana. 

Hybrid Tokens are a seamless blend of non-fungible tokens (NFTs) and fungible tokens (SPL).

The idea behind hybridization is that each NFT is represented by a specific number of SPL tokens, and holders can swap Hybrid NFTs for SPL tokens.

That sounds good in theory, but theory can only take you so far. 

Below are the benefits the hybridization model brings to Solana NFTs, and why traders everywhere are paying attention.

Measuring Perks

When evaluating the pros of SPL-404, a few things come to mind.

• First and foremost, increased liquidity for NFTs. Unless you’re living under a rock, you know NFTs have seen better days. Demand for liquidity has never been higher, and the trend has shown that traders have drifted to memecoins and tokens in placement of NFTs, because there is simply more liquidity. By hybridizing NFTs, you get the best of both worlds, and traders and collectors alike are both satisfied. 

• This might seem obvious, but fractionalization is another massive pro of the SPL-404 standard. Fractionalization is the “the act or process of a whole separating into two or more parts or pieces” and new tech like SPL-404 enables partial ownership of NFTs. Much like leasing a car, traders and collectors should always have an option to have partial ownership of their assets, rather than full commitment by default.

• Lastly, the last perk that SPL-404 enables is deflation via native deflationary tools with the help of token extensions. Burns and deflationary collections are quite a hot topic, and there are few ways to empower collections that want to take the leap. SPL-404 provides a solution to the problem.

Generative Hybrid Utility

What makes SPL-404 stand out compared to other Hybrid Tokens standards boils down to two things: Generative art and gamification via re-minting. 

As things stand, standards like SPL-20, and SPL-22 enable hybridization, but do not currently support unique artwork.

What makes SPL-404 so special is that each Hybrid NFT is represented by unique art… Yep, just like a good ol’ regular NFT collection. 

But what makes SPL-404 truly stand out is that they allow for 're-minting.' Re-mints bring gamification into the mix of traditional hybrid standards, and bring some of the magic back to NFTs via rarity speculation.

For example: Mutantmon’s re-mint allows holders to 'catch' new NFTs or 'release' them for tokens.

Another great example of utility can be found through Abble on Solana, where holders of $AABL will be able to provide liquidity, swap for ‘i404 NFTs’ and trade it on Tensor.

Conclusion

In conclusion, NFTs are evolving at lightspeed, and the SPL-404 standard is at the forefront of it. To stay up to date with Hybrid NFTs and more, follow Tensor on Twitter and subscribe to our blog.