What is Semi Fungible token?
In 2021, the world of crypto experienced a real bombing growth. In the exact year, NFTs grabbed the attention of crypto traders, where they faced an unbelievable boost. At the moment, there was a new definition showing up that willed the traders to take a look at in order to start trading; Semi Fungible Tokens. What is Semi Fungible Token and how does it work? Stay with us.
How does Semi Fungible Token Work?
In the first quarter of 2021, NFTs growth was spectacular. Reportedly NFT market volume has grown 2.4 billion dollars which is 20 times more than in 2020. On August 1st, NFTs trading volumes on Opensea trading platform reached 49 million dollars which was the highest of all time.
One of the first collections was CryptoPunks which now is the most famous one among all NFT lovers. This collection is traded on Ethereum Blockchain with 8.3 million dollars in volume in the market. Also this month, there has been a record of paying 66.919 ethers for NFTs.
What is a Fungible Token?
Mostly in the crypto market, traders can trade any digital currency with the other one. For instance, You can use your Bitcoin in a transaction and earn one in another trade. Are they the same? Absolutely not! Bitcoin is Bitcoin and you don’t care whether it’s the one you’ve spent or not.
What is a Non-Fungible Token?
It’s a type of token in which the owner claims ownership over the piece of digital art he has no matter what kind it is; it can be a painting or part of music. They are unique and mostly are used for digital art pieces or collections in general. With the advent of the metaverse, NFTs can be used to show you ownership over a land in the metaverse.
- NFTs are stored on the blockchain which means they have the following features:
- Indivisibility: It means you can not buy part of an NFT.
- Immortality: NFT will last forever.
- Unalterable: Changing data after any establishment is impossible. As far as NFTs are stored on public blockchains, the ownership they have can be approved anytime.
What is Semi-Fungible Token?
SFTs are new type of tokens which in their life circle they can be both non-fungible and fungible tokens. When they are supplied, they act as fungible tokens and are valued as same as other fungible tokens.
For instance, an Amazon token used for in-app purchases is worth 10 dollars is a semi-fungible token. These means that these tokens can be traded for a same valued token up to their expiration date. The distinguishing fact about semi-fungible tokens is the usage and the expiring date which will make them non-fungible tokens.
So let us define it in a better way. Imagine you’ve booked a concert ticket which is valued 10 dollars and can be traded for another ticket. But it has some conditions; Both tickets must be for a same date game and a specific seat. If the date has passed, this ticket is not valid any longer. However, this ticket will become a collective item with a new value. Also this ticket can not be used for another concert anymore.
Semi-Fungible Token features?
Most of the semi-fungible tokens use ERC-1155 standard to be designed. Also developers are using this standart to develop blockchain-based games like the Sandbox, Enjin and horizon games in 2017. This standard will provide a room for creating and managing smart contract based fungible and non-fungible tokens.
SFTs are mostly in gaming industry, where the collective items like weapons and customs are existing. This means that game making companies are working on these standards to provide a better gaming experience.
Semi-Fungible tokens can be designed based on smart contracts which they have the same capabilities as fungible and non-fungible ones. At the moment these tokens are only used in games and are not that usable. But in the future by a great development can be used differently.