Innovation Opportunities and Development Prospects of the SFT Asset Track

With the explosive popularity of Move smart inscriptions, the semi-fungible token (SFT) sector is garnering widespread attention. As a combination of NFT and FT, SFT possesses unique characteristics and tremendous innovative potential, expected to experience explosive growth in the upcoming bull market.

SFT originates from the ERC-3525 standard of Ethereum and officially became a new token standard of Ethereum in September 2022. As an underlying innovation, SFT can not only be split and combined but also possesses "container" properties and cash flow programming capabilities, making it particularly suitable for the financial and gaming sectors.

The success of Move Smart Inscription fully demonstrates the container capability of SFT. Each time an inscription is minted, an equivalent amount of SUI is locked, and users can burn it at any time to retrieve their principal. This mechanism greatly reduces the risk for participants while also causing a certain deflationary effect.

Currently, the SFT ecosystem has made progress in multiple areas. In terms of real-world applications, projects have already collaborated with the central banks of three countries. In the cryptocurrency sector, Solv has become a leader in the decentralized asset management space, with issuance scale exceeding 100 million USD. In the GameFi sector, several projects have utilized SFT characteristics to achieve innovative gameplay, such as AI-driven NPC interactions with player assets and cross-game point sharing. The DePIN and SocialFi fields have also seen a surge of projects that leverage the advantages of SFT.

There are still many potential innovative gameplay options for SFT in the future:

1. Fully Automated Dividend Agreement: Utilizing the cash flow programming capabilities of SFT, project parties can sell future portions of profits in advance for financing, achieving shared risk. Smart contracts can automatically distribute profits based on held shares without considering share circulation issues.

2. Web3 Fan/Creator Economy: SFT provides a more flexible asset structure for the SocialFi sector. Multiple types of "NFT" can be issued within one contract, facilitating cross-creator collaboration and the concept of "Open Loyalty."

3. Innovative DAO Governance Model: Based on fair sale of inscriptions and an automatic dividend mechanism, it may give rise to a brand new DAO governance structure, such as determining profit distribution based on early funding contributions and designing mechanisms to incentivize future contributors.

4. Asset Nested Compositions: The "container" characteristic of SFT allows for multi-layer asset nesting, such as having ETH inside SFT, or SFT inside SFT, providing unlimited possibilities for asset management.

The innovation space of the SFT track has yet to be fully explored. In the context where the market generally believes that this bull market lacks innovation and narrative, SFT may become a key force leading a new wave of innovation. For investors and developers, closely monitoring the development of the SFT track and exploring its technological potential will be an important strategy to seize future market opportunities.