404 Token Open-Sourced SC & dApp Build Out (Conversion System between NFT & FT using Pooled Marketplace Method)

Problem

While NFTs offer value for IP, token gating, and more, they face issues like illiquidity, capped holders, and CEX listing challenges. The 404 system solves this by enabling seamless NFT-FT conversion.

Total to date

This is the total amount allocated to 404 Token Open-Sourced SC & dApp Build Out (Conversion System between NFT & FT using Pooled Marketplace Method).

₳396,750

Total funds requested

About this idea

[GENERAL] Name and surname of main applicant

Jason Borck

[GENERAL] Are you delivering this project as an individual or as an entity (whether formally incorporated or not)

Entity (Incorporated)

[GENERAL] Please specify how many months you expect your project to last (from 2-12 months)

[GENERAL] Please indicate if your proposal has been auto-translated into English from another language

[GENERAL] Summarize your solution to the problem (200-character limit including spaces)

Develop open-source smart contract allowing NFTs and FTs to convert at set rates via a pooled marketplace (e.g., 1 NFT = 10K FTs, FTs can revert to NFT). This unifies utility and expands use cases.

[GENERAL] Does your project have any dependencies on other organizations, technical or otherwise?

[GENERAL] If YES, please describe what the dependency is and why you believe it is essential for your project’s delivery. If NO, please write “No dependencies.”

No dependencies

[GENERAL] Will your project’s output/s be fully open source?

Yes

[GENERAL] Please provide here more information on the open source status of your project outputs

Yes the 404 conversion SC will be completely open sourced as well as audited by a 3rd party.

Creation of a CIP with GitHub input solicited from key members of Cardano developer community
Creation of sample smart contract published open-source for swapping using the 404 protocol
Refinement of open-source contract and documentation, testing, or other required pull requests from community contributors

[METADATA] Horizons

Smart Contract

[SOLUTION] Please describe your proposed solution

Overview: Develop and open-source Aiken Cardano smart contract (SC) for the 404 system, allowing the exchange of NFTs for fungible tokens (FTs) and vice versa, with fixed conversion rates set by metadata or custom algorithm.

After the SC is completed, build out a functioning Frontend dApp where projects and users can set, make, and transact the conversions between NFTs & their FT pair through the 404 SC.

Problem: While NFTs are valuable for building IP, token gating, and other uses, they face challenges such as illiquidity, capped holders, difficulty being listed on centralized exchanges (CEXs), and higher barriers to fundraising. Additionally, when NFT projects launch FTs (or vice versa), the utility and value become divided between the two tokens. Until now, unifying the benefits of both NFTs and FTs has been nearly impossible, but the 404 system can solve this issue by allowing seamless conversion between the two.

Solution: We will create open-source SCs that enable NFT projects to set a conversion rate to their FT based on the NFT's metadata. Users can exchange NFTs for FTs within a marketplace, allowing the FT to function like any other fungible token with liquidity pools, exchange listings, and more. At any time, the FT can be used to buy back an NFT, creating a peg in value between the two assets. This system unifies their utility, unlocking the liquidity and flexibility of FTs while maintaining the uniqueness of NFTs. This concept has already been proven with Jellycube NFTs and $Jelly, demonstrating its viability.

After the SC is completed, we then create a functioning dApp Front-End that easily allows user & projects to fully leverage the SC functionalities.

For example, a WMT Node NFT valued at 150k ADA can be exchanged for 10,000 WMT 404 Tokens, enabling fractionalized ownership, potential lending/borrowing, exchange listings, and continuous reward generation through the NFT marketplace wallet—tapping into previously inaccessible liquidity.

We’ve already implemented this system for our Jellycubes project, allowing users to swap 1 Jellycube NFT for 10K $JELLY tokens. When swapped, the NFT enters a marketplace and can only be repurchased using 10K $JELLY, creating a unified peg between the NFT and FT. This approach combines the benefits of both assets while eliminating their negatives.

404 Site: https://bigfi.app/

Video Explanation:

https://www.youtube.com/watch?v=nX4r1lBXDy8

However, we initially built this without a smart contract. Now, we aim to develop a smart contract to offer a more secure, decentralized service to other projects, enabling them to leverage the same opportunities.

404 tokens are still in their early stages but are gaining traction across other chains as more people recognize their potential. Additionally a few projects are aligned to use the 404 system at launch, including RWA, NFT and DeFi.

Outcome: We believe the 404 model is the future of NFTs and FTs, opening up new possibilities for projects by unlocking liquidity and unifying the utility of both assets. Similar concepts have already appeared in other chains (e.g., Degods). The 404 model can lead to higher user engagement, more trading volume, and unlock new liquidity pools, even allowing for 100% Loan-to-Value (LTV) in NFT lending/borrowing through fractional ownership.

Why Catalyst: Aiken developers are highly specialized and costly. Funding is needed to build out the smart contracts for the 404 system, which we will open-source for the broader community to benefit from. Then we will have additional costs building out the Front-End and further supporting/marketing the platform.

[IMPACT] Please define the positive impact your project will have on the wider Cardano community

404 tokens unlock a wide range of use cases previously unattainable. Many NFTs struggle with liquidity due to the lack of a tradable FT on a liquidity pool. With 404 tokens, you can enjoy the benefits of NFTs—such as IP, branding, marketing, token gating, or representation of real-world assets—while eliminating the downsides through FT conversion. This allows for liquidity, fractional ownership, LP/trading fee yields, and CEX compatibility.

This innovation opens the door to more efficient trading markets, driving volume, attracting users, and expanding application possibilities.

[CAPABILITY & FEASIBILITY] What is your capability to deliver your project with high levels of trust and accountability? How do you intend to validate if your approach is feasible?

We've already implemented a non-smart contract version of this system, which has been working well for nearly a year. Now, we want to develop a smart contract version for greater security and decentralization.

We've received quotes from multiple developers and companies, all of whom are confident in delivering based on their experience.

Our team also includes a systems architect who has already mapped out the solution at a high level and the idea seems feasible from all perspectives.

[PROJECT MILESTONES] What are the key milestones you need to achieve in order to complete your project successfully?

A: Milestone outputs

Solution design and architecture including SC design
Frontend UX design

B: Acceptance criteria

Documented solution design and architecture that describes key architectural viewpoints as well as smart contract design
Documented high fidelity wireframes for the frontend