Semi Fungible Token Development Platform
The explosive growth of NFTs made “Fungibility” a dominant theme of 2021. Interest around the NFTs has reached meteoric levels with sales surging to over $2.4 billion in the first quarter. Leading NFT marketplaces like OpenSea is experiencing record high trading volumes. The introduction of new types of “semi-fungible” tokens (SFT) will revolutionize the way we think about and use cryptocurrencies. Let us try to get a brief understanding of this concept, the way it functions, and its benefits.
What Is SFT?
Semi-Fungible Token or more commonly referred to as (SFT). With cryptocurrency becoming more and more popular in the past few years and technological advances taking place more rapidly, blockchain’s use for cryptocurrency transactions by companies all over the world is also witnessing a rapid surge! It comes in as an improvement on the foundation of the Non-Fungible Tokens. SFTs are a relatively new group of tokens and the feature that makes it all the more interesting is the fact that it has properties of both fungible and non-fungible tokens throughout their lifecycle. Like regular fungible tokens, it allows swapping and trading with other identical SFTs but once it is traded or redeemed then it becomes non-fungible. Hence, a distinguishing factor that makes these special types of tokens “SFTs” is that these tokens lose their face value once they are redeemed. This feature strengthens its asset value. For example – Buying two concert tickets of the same date, price, and seat can be exchanged but the ticket becomes an NFT and a collectible after the exchange. A valid $50 Amazon voucher can be exchanged with an identical one if they have the same expiration date and thus are interchangeable. Expired tokens become non-fungible when there is a loss of exchangeable value. The process of transfer from its fungible to a non-fungible asset upon redemption is where SFT or semi-fungible tokens get their name.
We are all familiar with how coupons or vouchers work since we all use them. The coupons or vouchers work differently from other forms of currencies. Wondering how they are not the same in nature? The crypto nature of coupons and vouchers is the first distinguishing factor that makes them different from other forms of currencies. They are different from a cash or physical money but at the same time, they are also different from cryptocurrency. This form of money can best be used as an example of a semi-fungible crypto token.