Sirwin
Sirwin

What Is a Semi-Fungible Crypto Token? (part I)

By Notum DeFi App | Notum DeFi App | 15 Feb 2022


So, we've already revealed what is hiding behind those strange words — a crypto coin, a token, an NFT, but wait, there is something else we've almost forgotten to talk about! That's an SFT, or a semi-fungible token. We'll definitely find out some fruitful information about that thing soon, but first, let's uncover essential concepts. 

 

Fungibility

Fungible tokens and assets aren't unique, and they are replaceable. We can have a look at the US dollar as an example, $1 in one American city has the same value in another American city. A fungible token acts the same way — 1 Ethereum equals 1 Ethereum. So no loss in value is a necessary point. Fungibility is a proper of a token (or currency) to be exchanged or replaced with the same type of tokens with no change in value.

Fungible tokens have the following characteristics:

  • Divisible: You can divide the same tokens
  • Non-unique: there is nothing unique in $1 note, there are billions of the same notes all around the world 
  • Interchangeable: It's quickly replaced with the same value token or coin 

Examples: the US dollar, Euro, Bitcoin, Ethereum, etc.,

 

Non-fungibility

NFTs are based on a blockchain and can represent digital ownership of something one of a kind, such as a piece of art, collectibles, contracts, in-game items, or virtual real estate. This type of token can't be replaced, they aren't interchangeable but unique, as they are tied to a person who created or own it. So that means that digital artwork can't be exchanged 1:1, as they are two absolutely different assets. 

NFTs are stored on a blockchain, that's why each token has definite characteristics:

  • Indivisible: You can't buy parts of NFTs
  • Indestructible: You can't delete or remove it
  • Immutable: You can't change the underlying information once it's stored
  • Verifiable: NFTs are stored on public blockchains, so originality and ownership can be easily traced by anyone at any time

Examples: in-game items like a shield or a sward, digital and non-digital collectibles like a sports card, domain names, event tickets, a piece of land in a sandbox game, etc.

 

Semi-fungibility

Semi-fungible items are tokens that can be both fungible, and if needed, non-fungible. To put it simply, a token has value and can be exchanged for a token with the same characteristics. But then, at some point in time, the token loses its exchangeable value.

Examples: gift cards, vouchers, tickets, in-game items, in-game currency, etc.,

If it was interesting enough to read, you can find the second part of the article, let's meet in there!✌️

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Notum DeFi App
Notum DeFi App

We struggled to find the best platform for crypto investing, so we've created our own. Meet a cutting-edge app to buy, swap, stake, and enter the crypto market with ease today! 👉 https://notum.ai/


Notum DeFi App
Notum DeFi App

We struggled to find the best platform for crypto investing, so we've created our own. Meet a cutting-edge app to buy, swap, stake, and enter the crypto market with ease today! 👉 https://notum.ai/

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