As most of you know, that iPhone Dev-team is working on two important tasks, untethered jailbreak for iOS 4.2.1 on all iDevices and iPhone 4 baseband 2.10.04 unlock. MuscleNerd has replied via his twitter to someone who asked him about the capability of downgrading iPhone 4, Let's check out how MuscleNerd replied him.

mfaizulislam asking: for Baseband downgrade , can it be applied to iPh4 ?
MuscleNerd replying: conceptually, yep probably. But new i4 unlock must precede that because otherwise, nothing to downgrade from 01.59 to

So, the dev-team is working now on downgrading iPhone 4 baseband 2.10.04 to 01.59.00 which is unlockable using ultrasn0w, but it should be known, that it has not been confirmed the success of this idea so far.