ERC404 is undoubtedly an inspiring asset class, but it also has logical flaws that cannot be ignored:
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The continuously increasing erc20 minimum transfer threshold: As the number of erc721 minted increases, the minimum allowed transfer amount of erc20 will also increase, which will theoretically lead to the collapse of the asset model;
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Continuously improve erc721 tokenId: It is not conducive to binding static resources for each tokenId like traditional nft. the controllable and unrestricted tokenId groth will lead to rarity failure （Everyone will choose the tokenid with high rarity and give up the common one）;
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erc20 will cause the existing NFT to be permanently lost, which is highly uncertain;
So that would be the reason for ERC405 existence
Compare with ERC404:
| logical flaw | ERC404 | ERC405 |
|---|---|---|
| Increasing minimum transfer amounts threshold | Existing | Solved |
| rarity failure | Existing | Solved |
| erc721 uncertainty caused by erc20 transfer | Existing | Solved |