The Innovative Applications and Future Potential of SFT Assets in the Crypto Assets Market

With the explosive popularity of Move smart inscriptions, the semi-fungible token (SFT) sector is gradually attracting market attention. As a combination of NFT and FT, SFT has unique characteristics and broad application prospects. This article will explore the concept of SFT, the current ecological status, and potential innovative gameplay in the future.

The Concept and Characteristics of SFT

SFT originates from Ethereum's ERC-3525 standard and officially became a new token standard for Ethereum in September 2022. It combines the characteristics of NFTs and FTs, allowing for the splitting and combining of assets, while also possessing "container" properties and cash flow programming capabilities. These features make SFT particularly suitable for the finance and gaming sectors.

The container capability of SFT is fully reflected in Move inscriptions. Each inscription locks an equivalent amount of SUI tokens as a minting fee, and users can burn the inscription at any time to reclaim their principal, which reduces the risk for participants.

Current Status of the SFT Ecosystem

Currently, SFT has applications in multiple fields:

1. Real Economy: Projects in cooperation with the central banks of three countries are progressing.
2. DeFi: A certain asset management platform has become a leader in the decentralized asset management track, with an issuance scale exceeding 100 million USD.
3. GameFi: Multiple projects utilize SFT to achieve AI-driven NPC and player interactions, as well as innovative gameplay such as cross-game points sharing.
4. DePIN and SocialFi: Some projects are exploring the application of SFT in these emerging fields.
5. Modern Encryption: The combination of SFT and modern encryption has created some new possibilities.

Potential Innovative Play of SFT

1. Fully Automatic Dividend Agreement

The cash flow programming capability of SFT allows for the management of fund flows within smart contracts. Project parties can sell future cash flow revenues in advance to raise funds, achieving risk sharing. This model is similar to the "drip-through" in traditional finance, but it has greater advantages when implemented on the blockchain, with everything automatically executed by smart contracts.

2. Web3 Fan/Creator Economy

SFT provides a more flexible asset structure for the SocialFi track. It can issue multiple types of "NFT" within a single contract, allowing for interaction between different types and avoiding the redundancy of deploying multiple contracts. This structure makes it easier to realize the concept of "Open Loyalty", where loyalty programs can be shared among different organizations.

3. New DAO Governance Model

Based on the fair issuance of inscriptions and automatic dividend mechanisms, a brand new DAO governance structure may emerge. For example, by issuing smart inscriptions to raise funds for the establishment of a DAO, early members can determine the initial profit distribution mechanism based on their investment amount and design mechanisms to incentivize future contributors.

4. Asset Nested Portfolio

The "container" feature of SFT can theoretically achieve multi-layer asset nesting, such as including ETH within SFT, or another SFT within SFT, etc. This nesting structure provides new possibilities for asset management and trading.

Conclusion

SFT, as an innovative asset type, demonstrates immense potential in the current market. It can not only bring new solutions to existing financial and gaming sectors but may also play a significant role in emerging fields such as social economy and DAO governance. With the market's increasing demand for innovation, the SFT track is worth close attention from investors and developers.