SFT: New Opportunities in the Wave of Smart Inscriptions

With the explosive growth of smart inscriptions in the Move ecosystem, the semi-fungible token (SFT) track is expected to achieve breakthrough development in the upcoming bull market. This article will explore the innovative applications that SFT assets may bring, as well as why the SFT field needs to be a key focus in this market cycle.

The Essence and Advantages of SFT

SFT (Semi-Fungible Token) 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 NFT and FT, representing a super NFT with greater innovative space and composability. The uniqueness of SFT lies in its "container" nature and cash flow programming capabilities, making it particularly suitable for complex asset structure design in the financial and gaming sectors.

Move Smart Inscription and SFT

The popularity of Move smart inscriptions fully demonstrates the container capabilities of SFT. Each time an inscription is minted, an equivalent amount of SUI is locked as the minting fee, allowing users to retrieve their principal at any time by burning the inscription, while also creating a certain deflationary effect. This mechanism ensures that first-level market participants are almost guaranteed not to incur losses, as they only need to bear very low gas costs to achieve potentially high returns, and the characteristic of not going to zero also encourages more people to participate.

Innovative Applications of SFT

1. Fully Automatic Dividend Agreement

SFT can program cash flows, enabling the management of fund flows within smart contracts. Project parties can sell part of their future cash flow revenues in advance for financing, sharing risks with users. This model is similar to "drip through" in traditional finance, but its implementation on the blockchain offers greater advantages, with everything being executed automatically by smart contracts.

2. Web3 Fan/Creator Economy

SFT provides a more flexible asset structure for the SocialFi track. Compared to traditional NFT and FT solutions, SFT can issue multiple types of "NFT" within a single contract, allowing different types to interact with each other while also remaining independent, making the design more flexible. This helps to realize the concept of "Open Loyalty", enabling different organizations to share loyalty programs and achieve win-win cooperation.

3. Innovative DAO Governance Model

Based on the inscription fair sale and automatic dividend mechanism, a brand new DAO governance structure may emerge. For example, by issuing smart inscriptions to raise funds to establish a DAO, early members can determine the initial profit distribution mechanism based on their contribution amount and design incentives for future contributors.

4. Asset Nesting Portfolio

The "container" characteristic of SFT theoretically allows for multi-layer asset nesting, such as embedding ETH within an SFT, or embedding another SFT within an SFT, and even more complex nested structures. This flexibility provides ample space for asset management and financial product innovation.

Conclusion

In the current market, where there is a general perception of a lack of innovation and new narratives, SFT demonstrates enormous imaginative space and application potential. Whether in the fields of DeFi, GameFi, DePIN, or SocialFi, SFT is expected to bring revolutionary changes. In this bull market, the SFT sector is undoubtedly worth close attention and in-depth research.