SFT: A New Emerging Asset Class Rising in a Bull Run

After the rise of the smart inscription trend, the semi-fungible token (SFT) track is expected to explode in this bull run. As a new type of asset class, SFT not only inherits the advantages of non-fungible tokens (NFT) and fungible tokens (FT), but also has greater innovation potential and combinability. So, what innovative opportunities can SFT bring to various fields? Why must we closely monitor the SFT track in this bull run?

The Essence and Characteristics of SFT

SFT is derived from the ERC-3525 standard of Ethereum and officially became a new token standard on Ethereum in September 2022. It can be seen as a combination of NFT and FT, representing a super NFT with higher flexibility. The main features of SFT include the ability to be split and combined, "container" attributes, and cash flow programming capabilities. These features make SFT particularly suitable for complex fields such as finance and gaming.

Application of SFT in Move Smart Inscriptions

In certain smart inscription protocols, the container capabilities of SFT are fully demonstrated. Each time an inscription is minted, an equivalent amount of native tokens is locked up, and users can retrieve their principal at any time by destroying the inscription. This mechanism greatly reduces the risk for participants, while also bringing a deflationary effect to the project.

Innovative Application Scenarios of SFT

1. Fully Automated Dividend Agreement: Utilizing the cash flow programming capabilities of SFT, project parties can sell a portion of future cash flow earnings in advance for financing, achieving risk sharing. Smart contracts can automatically distribute earnings based on the holders' shares without considering the circulation of shares.

2. Web3 Fan/Creator Economy: SFT provides a more flexible asset structure for the SocialFi sector. It allows the issuance of various types of "NFT" within a single contract, facilitating the sharing and collaboration of loyalty programs among different organizations.

3. Innovative DAO Governance Model: Based on fair issuance of inscriptions and automatic dividend mechanisms, SFT may give rise to a new DAO governance structure. For example, by issuing smart inscriptions to raise funds to establish a DAO, and designing a benefit distribution mechanism based on contributions.

4. Asset Nested Combination: The "container" characteristic of SFT allows for multi-layer asset nesting, such as embedding ETH within an SFT, or embedding another SFT within an SFT, and it is even possible to design nested structures that require a specific SFT to unlock.

SFT Ecological Status

In terms of real-world applications, projects have already collaborated with multiple central banks to promote the application of Web3 technology in practical scenarios. In the cryptocurrency field, some projects have innovatively attempted to utilize the ERC-3525 standard in areas such as DeFi, GameFi, DePIN, and SocialFi. For example, in GameFi, SFT is used to enable AI-driven NPC interactions with player assets, as well as cross-game point sharing and other functionalities.

Conclusion

Although the market generally believes that this bull run lacks innovation and new narratives, the potential of SFT has not yet been fully explored. As a highly flexible and innovative asset type, SFT is expected to bring more groundbreaking applications to the Web3 ecosystem in the future. In this opportunity-filled bull run, closely following the SFT track will be a wise choice.