Author: Wenser, Odaily Planet Daily

The 314 protocol driven by ERC314 is gradually spreading to various chains. The last protocol standard that attracted so much attention may have been the ERC404 protocol led by Pandora. Looking further back, the recent hot phenomenon even reminds many people of the previous NFT craze led by ERC721.

X314 on the BSC chain has achieved a thousand-fold increase in just two weeks since its launch on March 27th (April 8th). The price has risen from the initial price of $0.00349 to around $4.2 at the time of writing, with the peak reaching over $5.3. Various 314 protocol tokens with "Meme" as a prefix on the one-stop chain trading platform Pionex's X314 section have attracted many traders with increases of over 30%.

In view of the hot performance of the 314 protocol, Odaily Planet Daily will lead everyone to get to know this new protocol standard, which is claimed to "eliminate the need for intermediaries such as DEX" (Note: Currently, the 314 protocol is only a commonly used term, referring to the contract standard used for tokens that can be bought and sold through contract transfers, and is not endorsed by any official organization. Odaily reminds users that new project market fluctuations are large, investment risks are extremely high, please pay attention to asset security, and choose investment targets carefully).

The Origin of the 314 Protocol: A New Protocol Born from a Social Experiment

https://app.simplifyerc.com/

So, where did the 314 protocol come from?

To talk about this, we need to go back about three weeks, to 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 according to a ratio of 45% for LP, 45% for seed round presale, and 10% for a 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, transfer tokens to its contract for selling, and the gas cost is much lower than the swap transactions on DEX. The project's official white paper provides a detailed explanation and introduction of the ERC314 protocol, and mentions that any project can deploy ERC314 protocol tokens.

ERC-20 VS ERC-314 Comparison

Subsequently, SIMP skyrocketed from its low point to over $50 in just a few hours, with a hundred-fold increase by the next day.

On March 21, the official account @Simplify_ERC314 of the ERC314 protocol (the account has been deactivated) emphasized on X platform that the project was a social experiment. Subsequently, some community members provided feedback that the protocol contract formula had problems, and the LP Owner permission for the liquidity pool had not been truly transferred. Many people were subjected to sandwich attacks during the buying and selling process, resulting in increased trading costs. Although professional smart contract engineers later explained the contract formula part of xy=k, the SIMP token still fell amidst fud, dropping to around $6 in less than a day, a decrease of nearly 90% from the peak, and eventually approaching zero as time passed, with the price falling to around $0.08. At the time of writing, the SIMP token, influenced by the 314 protocol market sentiment, has risen to around $0.5.

The ERC314 protocol innovation, which was originally expected to eliminate intermediaries such as DEX, save on trading costs, and to some extent prevent MEV attacks, came to a halt. However, the new 314 protocol inspired and driven by this has already been on the way.

• On March 22, the LONG314 token deployed on the BSC chain was launched, allowing users to directly interact with the contract address by transferring BNB to achieve token trading.
• On March 26, the project officially stated that in order to optimize the shortcomings of ERC314 and LONG314, it plans to upgrade the protocol by adding a sales cooling mechanism and LP burning mechanism to avoid bot attacks and promote token price increases.
• On March 37, the X314 protocol token deployed on the BSC chain was launched.
• On March 29, X314 started a staking lottery activity, with the contract upgraded to a 60-second trading cooldown, automatic burning of 6% LP every 24 hours, and the destruction of over 1 million X314 tokens daily.
• On April 1, the official BSCNews account sponsored a tweet to promote the X314 project.
• On April 2, the X314 token price surged, attracting attention to on-chain data.
• On April 6, Ave.ai launched the X314 section and added a X314 Telegram community promotion slot to the homepage banner position.
• On April 7, the X314 token price broke through $1.
• On April 8, the X314 token price continued to rise, briefly surpassing $5.3. At the time of writing, the X314 price has fallen to around $3.8.

Driven by the rise of the X314 protocol and token, the trading volume of various projects in the X314 section of the Ave.ai platform has surged, and buying and selling activities are extremely active.

The Hottest 314 Tokens at Present

The following are the currently active 314 protocol-related token projects with relatively high market value and liquidity. The data mainly comes from Ave.ai (Note: Odaily Planet Daily only shares and communicates, and does not endorse any projects. Users must do their own research, pay attention to asset security, and choose investment targets carefully).

X314: Around $3.8

Total token supply: 21 million;

Contract permissions: Temporarily not abandoned (official explanation is that the contract is still being continuously updated and needs to be repaired and optimized for issues);

Circulating market value: Around $33 million;

Total LP liquidity: Around $1.8 million.

As the leading token in the X314 section, X314 can be said to be the "culmination" of this protocol:

• It has inherited and innovated to a certain extent from ERC314 and LONG314
• LongSwap platform provides a smooth swap trading experience
• It has a pioneering sales cooling mechanism and LP burning mechanism
• A 90-day staking incentive activity
• Community user incentive lottery activities and other operations

Thanks to its recent market performance and market operation activities, the X314 Telegram community has gathered over 13,000 members, and community communication is quite active. It is worth mentioning that the X314 official account has attracted the attention of CZ, and it is not yet certain whether this account is a purchased account.

LONG-314: Around $0.25

Total token supply: 21 million;

Circulating market value: Around $6.18 million;

Total LP liquidity: Around $360,000.

LONG314 is a token issued based on ERC314 by the X314 project. The X314 official account had 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 value: Around $2.08 million;

Total LP liquidity: Around $250,000.

BNB314 was launched on April 6, and the project claims to be jointly initiated by BNB whales and the community, with consistency with X314 in buying and selling operations, trading cooldown mechanisms, and preventing sandwich attacks, but the LP deflation ratio is 12% per day.

Y314: Around $0.04

Total token supply: 20.40 million;

Circulating market value: Around $900,000;

Total LP liquidity: Around $130,000.

Y314 was launched on April 6, and it is touted as the "first 314 protocol chromosome concept coin." It is evident that this is a project purely riding on the coattails of X314, so everyone must be cautious of the risks.

BTC314: Around $0.04

Total token supply: 17.8 million;

Circulating market value: Around $720,000;

Total LP liquidity: Around $130,000.

BTC314 was launched on April 5, and similar to other 314 protocol tokens, the only difference is that the LP burning ratio is only 2% every 24 hours.

DAPJ: $0.000048

Total token supply: 6.6 billion;

Circulating market value: Around $320,000;

Total LP liquidity: Around $90,000.

DAPJ was launched on April 7, and unlike the aforementioned 314 protocol tokens, it was issued on the Base chain and focuses on the Meme concept.

314 Protocol: Technological Innovation or 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 detailed explanations 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." Recently, EV Terminal also announced on its official account that SageERC314 had acquired the previous SIMP issuer Simplify and would integrate SIMP with SAGE.

When SIMP first appeared, crypto KOL @0xSunNFT believed that "the core concept of ERC314 is to optimize token trading gas, requiring only one transfer to complete the buying and selling," and that "the restriction of only one transaction per address in the same block prevents sandwich attacks," which is relatively innovative and "a project that catches the eye."

AC Capital founder and Open_Rug manager CryptoV sees ERC314 as the "latest advancement of Ponzi on Token," directly realizing "Token as an L2" and "Uniswap on Token," replacing the functions of L2 and DEX, to some extent achieving what "Facetswap wanted to do but didn't," and even surpassing "Pandora, which denied NFTX" (referring to the project that introduced the ERC404 concept).

Crypto researcher Haotian provided a simple retrospective summary of the "failure" of SIMP and the ERC314 protocol. He believes that, first, "like ERC-20 and other token standards, ERC314 can be considered a new standard, but its innovation is 'overrated.'"

Secondly, "ERC314 uses a 'black box' pricing mechanism, which reduces the slippage and high gas cost issues in real-time swap calculations through this predefined and somewhat centralized method. The downside is that this 'black box' logic setting within the contract requires user trust, and whether the contract issuer is malicious is a critical issue."

Finally, "ERC314 has made some 'fine-tuning' to the previously common trading paradigm, adding a 'pre-processing' or 'black box' operational logic in the contract pricing mechanism and token 'buying and selling' methods. I am more inclined to think of this as an intent trading paradigm, particularly suitable for small MEME tokens using private placement circulation. Due to the somewhat complex contract logic and potential centralized trust issues, it is difficult for it to become a mainstream circulation method for large-scale assets."

Overall, Haotian believes that ERC314 is a niche micro-innovation play, more suitable for the "niche hype of Meme," and is unlikely to be widely accepted in the mainstream market.

The recent 314 protocol craze driven by X314 is seen by many as a short-term speculative target, with most people mentioning the project and similar projects for their "advantages of no trading fees, relatively low market value, CZ's attention, backing from platforms, and staking." Therefore, the future market performance of the 314 section represented by X314 still has a high degree of uncertainty.

Conclusion

Overall, X314 has made some innovations based on ERC314, and the trading cooldown mechanism and LP burning mechanism have to some extent alleviated the intensity of on-chain PVP, thus avoiding the "pitfalls" of SIMP. New branches have grown in the BSC chain ecosystem, but due to the strong liquidity, the friction cost of buying and selling transactions has been minimized, making it difficult to avoid short-term price fluctuations and market value fluctuations.

In addition, the control of contract permissions by the project team is a potential hidden danger for this type of project. Therefore, participating in such projects carries a high level of risk, and the future development and token trends largely depend on the scope and operations of the project team.

Therefore, the 314 protocol is unlikely to gain widespread application in the short term, like standard protocols such as ERC 721. However, we have reason to believe that mechanisms that can accelerate the efficiency of capital liquidity circulation and enhance decentralized token trading will continue to develop in more on-chain ecosystems. In certain races and fields, they will provide a certain supplement to DEX and other trading channels.

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