Blockchain gave rise to a huge number of cryptocurrency assets. One such crypto asset that got heavy prominence back in 2017 was Non-fungible token, popularly known as NFT. These were something different from the Fungible Tokens (FTs) as the former provides ownership rights to the creators. Besides NFTs and FTs, there is another kind of token that lesser people know of. This is none other than Semi Fungible Token or SFT. So, basically, SFTs possess the characteristics of both NFTs and FTs. That said, we can actually develop SFTs with NFT development services.
These crypto assets are constantly changing the gaming experience and have more presence in the digital world. This article will aim to provide you with more clarity about these relatively new tokens.
What Is A Semi Fungible Token (SFT)?
A Semi Fungible Token (SFT) can be defined as a kind of crypto asset or a crypto token that is comparatively new combining the characteristics of NFTs and FTs. Initially, these tokens function as fungible tokens. This means that you can actually exchange them for other tokens of a similar nature.
Sooner they cease having face value, they function as NFTs or Non Fungible Tokens.
For instance, event tickets can be considered an SFT. Before a performance, those event tickets can be exchanged with another ticket to the same event showing the functions of an FT. That said, you cannot actually exchange that ticket for another one after the event. So now, it works as an NFT. Owing to the easy adaptability of SFTs, they have paved the way for a lot of opportunities.
The astounding growth of NFTs led to the development of semi-fungible tokens, which bridge the gap between fungible and non-fungible assets. To bridge the gap between fungible in-game currency and non-fungible collectibles like weapons, SFTs are primarily used in the gaming industry. For more related articles, visit https://cryptoventurenews.com/category/guides/learn/what-is/.
What Are The Benefits Of A Semi Fungible Token?
The following are some of the most prominent advantages of SFT. That said, these benefits can help these crypto assets to take over the world. Have a look!
Considering FTs and NFTs, SFTs are far more flexible. This is because of the fact that you can easily exchange them or swap them for other similar tokens. This advantage of STF makes it pretty simple for the developers to code. Additionally, the benefit of flexibility also enables the players to carry on their in-game purchases.
A Semi Fungible Token or SFT can be bought or sold in fractions. This is just the opposite in NFTs, where the NFTs do not support fractionalization. Since SFTs possess both the features of FTs and NFTs, it permits you to fractionalize them.
A Semi Fungible Token or SFT retains its value even after they are traded with another person. Thus, if you have not redeemed the token, the value will not change. Thus, as a result, SFTs offer more liquidity for the value of the crypto asset.
Unique Selling Proposition
In order to gain a competitive edge in the market, business innovation often has its own distinctive features. Due to their ERC-721 compliance, semi-fungible crypto tokens are clearly superior to their rivals. Contrary to other tokens, they do not adhere to these standards.
A host of digital platforms or digital applications approve SFTs. These tokens can easily be used in asset trading, games, and other activities. That said, blockchain technology makes it easier to preserve the history and value of a specific token. As the users possess faith and trust in these crypto tokens, more people are adopting these crypto assets.
What Are The Use Cases Of SFTs?
SFTs enable people to use these cryptocurrency assets in various sectors. This includes e-commerce, gaming, and more. Let us get into the details of the two most prominent use cases.
The ERC-1155 standard was developed by the blockchain gaming company named Enjin. The same company has given rise to SFTs. Nevertheless, at present, the majority of the application cases of ERC-1155 directly relate to video games. For example, SFTs duplicate the same resources in Sandbox, a metaverse game.
Tickets & Gift Cards
There were several issues with the traditional ticketing sector. As already mentioned, SFTs have both the characteristics of FTs and NFTs. Thus, initially, it works as FT and later on like NFTs. So, after the event, a Semi Fungible Token takes the characteristics of a collectible. That said, vouchers and gift cards can also be issued as SFTs that later transfer to an NFT after it is redeemed or the voucher expires.
How To Create A Semi Fungible Token?
A Semi Fungible Token or SFT can be very easily created by making use of the ERC-1155 standard of Ethereum (ETH). Whenever 1155 is created, it produces a unique item. It is made up of ERC-20 and ERC-21. Back in 2017, the blockchain game developers, The Sandbox, Enjin, and The Horizon Games developed the standard. They used a combination of fungible and non-fungible token standards. NFTs always demand a new contract for individual transactions. Not similar to them are the SFTs which enable the creation of tokens with a single smart contract. SFT development is ideal for the gaming industry since fungible tokens are widely used for transactions.
Semi Fungible Tokens: The Future
The SFT is still in its infancy, and people are only now becoming aware of this new kind of token. Flexible, traceable, and more are all benefits they offer to their users. It is also possible to use semi-fungible tokens as an alternative to non-fungible tokens. A gaming platform that requires fungibility is an excellent choice. Furthermore, physical and digital currencies are less secure than SFTs. Despite being around forever, these tokens will influence how the digital world develops.
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