What innovative gameplay can the semi-homogeneous asset track SFT still have?

Author: Spinach Spinach

After the explosive popularity of Move smart inscriptions, will the SFT (Semi-Fungible Token) track of semi-fungible assets explode in the bull market? What innovative gameplay can SFT-type assets still have?

How can SFT bring new innovative space to various tracks? Why must we pay attention to the SFT track in this bull market?

Spinach will talk about what SFT is and what potential opportunities still exist in the SFT asset track under the phenomenon of the explosive popularity of MOVE inscriptions.

Following the last time Spinach utilized the characteristics of Move smart inscriptions SFT to create the theoretical "ten-thousand-fold return," the MoveScriptions team immediately launched the official trading market.

The project team chose to sort based on the amount price rather than the inscriptions themselves, which is a mechanism very suitable for the trading of SFT assets, avoiding the awkward situations of NFT trading logic.

At the same time, many friends are also asking what SFT is?

SFT (Semi-Fungible Token) originated from Ethereum's ERC-3525 standard, which was officially passed in September 2022 as a new token standard for Ethereum. Once passed, it attracted significant attention, not only because it is a fundamental innovation but also because it is a standard designed by our Chinese team, Solv Protocol.

However, due to its birth in a bear market, its enormous potential has not received much attention, but the potential is immense!

In simple terms, you can understand SFT as a combination of NFT and FT, a super NFT that can be split and combined, but has higher innovative space and combinability than both NFT and FT, along with some unique characteristics, such as "container" properties and cash flow programming capabilities.

For more technical details, you can refer to Spinach's previous articles. In summary, SFT can create complex structured assets, especially suitable for finance and gaming fields.

The container capability of SFT can be fully reflected in MOVE inscriptions. Each time an inscription is minted, an equivalent amount of SUI is locked in as the minting fee, which can be burned and withdrawn at any time to recover costs, and burning will also cause a certain degree of deflation.

This mechanism ensures that primary participants almost never lose money; they only need to spend negligible gas costs to obtain potential high returns, and the non-zero feature also motivates many people to participate.

Seeing that @jolestar developed the MOVE inscription protocol using the SFT structure and achieved such explosive popularity, Spinach is also very pleased and has written two tweets introducing the technical advantages of SFT. Of course, Spinach does not encourage everyone to speculate on MOVE inscriptions and does not provide any investment advice; DYOR.

Spinach also wants to discuss what innovative gameplay SFT can have. What new narratives are there? What is the current state of the SFT ecosystem?

First, let’s briefly introduce the current state of the SFT ecosystem. In the real world, we have officially incubated projects using ERC-3525 in cooperation with the central banks of three countries and will continue to promote the application of Web3 technology in the real world with these authoritative institutions in the future.

In the Crypto field, Solv, which operates on-chain fund businesses in the DeFi sector, has become a leader in decentralized asset management, having surpassed a billion dollars in asset issuance scale.

In the GameFi sector, several project teams have used ERC-3525 to create innovative gameplay, such as combining AI to enable NPCs to interact with players' assets and utilizing SFT's characteristics to facilitate points sharing across different game types.

In the DePIN and SocialFi sectors, several project teams have also leveraged the advantages of ERC-3525 to enhance their project's competitiveness. In the field of modern cryptography, the combination of SFT and modern cryptography has also produced some wonderful chemical reactions.

Of course, the imaginative space for SFT is not limited to this. Spinach also proposes some potential gameplay for SFT:

1. Fully Automated Dividend Protocol

One very important feature of SFT is its ability to program cash flow. In simple terms, the flow of money can be managed within a smart contract. For example, project teams can sell part of their future cash flow in advance for financing, allowing users to share risks with the project team.

This model has actually been running in the traditional financial sector in China, where the future cash flow of small and medium-sized enterprises is used as a financial product's "drip connection." However, implementing this on-chain would have more advantages, with everything executed automatically by smart contracts.

Project teams only need to combine the dividend contract with the project contract or manually input into the dividend contract, and the SFT contract will automatically distribute dividends to all SFT holders based on their share, regardless of how the shares circulate.

In this bull market, this financing method of selling future cash flow may shine brightly, and even lead to some creative gameplay, such as a certain project issuing an SFT asset to finance everyone to speculate on contracts and share the profits.

2. Web3 Fan / Creator Economy

The explosive popularity of FriendTech has also led many to start paying attention to what new gameplay SocialFi can offer. SFT actually provides a more flexible asset structure.

How to tokenize the relationships between fans through blockchain has been a direction of exploration in the SocialFi track. While traditional methods using NFTs and FTs are technically feasible, achieving certain operations would significantly increase technical complexity.

For example, different creators/rooms need to issue a set of NFT contracts to distribute to fans. If they want to collaborate with other creators to provide benefits to fans, it becomes technically cumbersome.

Since SFT can express both NFTs and FTs, and can issue multiple types of "NFTs" within a single contract, different types can interact with each other or remain non-interactive, providing great flexibility in design. This avoids the redundancy of deploying multiple contracts and makes it easier to realize a narrative of "Open Loyalty," where different organizations can share their loyalty programs for mutual benefit and create more value.

Additionally, utilizing its automatic dividend feature to allocate benefits based on fans' contributions through SFT is also a significant advantage.

3. A New Paradigm of DAO Governance

This idea is purely speculative. In many DAO governance processes, a significant amount of conflict arises from the profit distribution mechanism. Based on the fair sale of inscriptions and the automatic dividend mechanism, could a brand new governance structure emerge?

For example, by issuing smart inscriptions to raise funds to establish a DAO, early DAO members could determine the early profit distribution mechanism based on the amount of funds contributed and design mechanisms to incentivize future contributors. Of course, this content is just a brainstorming idea, left for everyone to discuss.

4. Asset Nesting and Combination Gameplay

Due to the "container" nature of SFT, it theoretically allows for multi-layer asset nesting, much like Russian nesting dolls, with infinite nesting possibilities.

For example, can an SFT contain an ETH, or can an SFT contain another SFT? Can an SFT contain another SFT that contains an SFT? Would another SFT need to be burned to unlock the assets inside? The imaginative space is vast, leaving it for everyone to ponder.

In summary, the market generally claims that this bull market lacks innovation and narrative. The imaginative space of SFT is far from limited. In this bull market, shouldn't you pay attention to the SFT track?