New Opportunities for SFT Assets: Exploring the Innovative Space of Semi-Fungible Tokens from the Popularity of Move Smart Inscriptions

With the rapid rise of Move smart inscriptions, the semi-fungible asset (SFT) sector is expected to explode in the upcoming bull market. As a new type of asset, SFT not only combines the characteristics of non-fungible tokens (NFT) and fungible tokens (FT), but also possesses broader space for innovation and versatility. This article will explore the potential innovative applications of SFT and why the SFT sector deserves attention in this bull market.

Introduction to SFT

SFT originates from Ethereum's ERC-3525 standard and officially became a new token standard on Ethereum in September 2022. It can be seen as a combination of NFTs and Fungible Tokens, representing a highly flexible super NFT. The uniqueness of SFT lies in its "container" nature and cash flow programming capability, making it particularly suitable for the design of complex asset structures in the financial and gaming sectors.

Move Smart Inscription and SFT

The Move smart inscription fully demonstrates the container capability of SFT. Each time an inscription is minted, an equivalent amount of SUI is locked as the minting fee. Users can retrieve their principal at any time by burning the inscription, which also creates a certain deflationary effect. This mechanism greatly reduces the risk for participants, as they only need to pay a small amount of gas fees to have the opportunity to earn substantial returns. The non-zero property also encourages more people to participate.

Innovative Applications of SFT

1. Fully Automatic Dividend Agreement

The cash flow programming capability of SFT allows project parties to sell part of their future cash flow income in advance for financing, achieving shared risk. This model is similar to the "drip-through" in traditional finance, but its implementation on the blockchain has greater advantages, as everything is executed automatically by smart contracts. In a bull market, this financing method may shine brightly, and even give rise to some innovative plays.

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 different types to interact with each other or remain independent, greatly simplifying technical complexity. This feature helps to realize the concept of "Open Loyalty", enabling different organizations to share loyalty programs and create more value.

3. Innovative DAO Governance Model

Based on the fair sale of inscriptions and the automatic dividend mechanism, SFT may give rise to a new DAO governance structure. For example, by issuing smart inscriptions to fund the establishment of a DAO, early members can determine the initial profit distribution mechanism based on their investment proportion and design an incentive plan for future contributors. This model is expected to bring new ideas to DAO governance.

4. Asset Nested Portfolio

The "container" feature of SFT theoretically allows for multi-layer asset nesting, similar to Russian nesting dolls. This feature provides infinite possibilities for asset combinations, such as having ETH inside an SFT, or another SFT inside an SFT, and even designing complex structures that require the burning of specific SFTs to unlock internal assets.

Conclusion

Although the market generally believes that this bull market lacks innovation and new narratives, SFT has shown us a broad space for imagination. As a flexible and innovative asset type, SFT has the potential to trigger changes in multiple fields. In this bull market, it would be wise to closely monitor the development of the SFT track.