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'The new way to become a millionaire' I know, this line may manipulate you. But I have added this with a clear view based on the current market. The market for Non-Fungible Tokens (NFTs) was worth $16 billion in 2019. It's expected to jump from $21.39 billion in 2023 to $212 billion by 2031. That's a big growth rate of 33.7% from 2024 to 2031. Yes, NFT Development is the new way to become a millionaire.
But this blog is not about NFTs, it's about its sibling SFTs (semi-fungible tokens). It is often confused with non-fungible tokens (NFTs), SFTs have their own unique characteristics and use cases. In this blog, we will learn about semi-fungible tokens, including how they are developed, their potential applications, the role of SFT development companies, and how they will be differentiated from NFTs. Without wasting a minute, let's dive deeply into the blog.
In simple words, Semi-Fungible Tokens (SFTs) are a kind of digital stuff that's a mix of two other types: fungible and non-fungible tokens. Fungible tokens are all the same, like coins or dollars, but SFTs have some differences within a certain range. This means they're not identical to coins, but they're not unique like non-fungible tokens.
Think about it like this: in some video games, you can collect things like swords or armor. Each sword might have different strengths or looks, but they're all swords. That's like SFTs. They're not the same, but they're not different either.
So, SFTs are kinda like the middle ground between things that are the same (fungible) and things that are completely different (non-fungible). They give you some options while still being part of a group.
The technology behind Semi-Fungible Tokens (SFTs) uses blockchain. SFTs are made, stored, and moved around on blockchain networks using smart contracts, which are like digital agreements that work automatically.
What makes SFTs special is they can represent digital things that are a bit different from each other. This is done by adding extra information, called metadata, to each token. This metadata tells us more about the token, like what it looks like or what it can do.
For example, in a video game, each SFT might have metadata saying what kind of item it is, how rare it is, or what powers it has. This helps each token stand out from others that are similar. SFTs can be bought, sold, and owned just like regular tokens.
1. Choose the best SFT Development Company:
Begin by selecting a reputable NFT development company that specializes in creating digital assets on the blockchain. Make sure the chosen company has experience in developing SFTs and can provide the necessary technical expertise.
2. Define token attributes:
Decide what features you want your SFTs to have. For Example, Axie Infinity thought about things like how the in-game creatures, like Axies, look, what type they are, their body parts, and what they can do. These features should vary a bit while still keeping the SFTs semi-fungible.
3. Develop smart contracts:
Use blockchain technology, such as Ethereum, to develop smart contracts that will govern the creation, transfer, and ownership of SFTs. These smart contracts should include logic for minting new tokens, transferring ownership between users, and handling interactions with the tokens.
4. Incorporate metadata:
Add metadata to each SFT to provide additional information about the token's attributes and properties. In the case of Axie Infinity, metadata includes details about the Axies' characteristics, such as their genetic makeup, appearance, and abilities. This metadata helps distinguish one SFT from another within the same category.
5. Test and deploy:
Thoroughly test the smart contracts and SFTs to confirm they function as intended and are free from vulnerabilities. Conduct security audits to identify and address any potential risks. Once testing is complete, deploy the SFTs on the blockchain network, making them available for use and trade by users.
➤ Wide Adoption:
SFTs will be used in many industries, not just gaming or art, as businesses realize their benefits in real estate, supply chains, and finance.
➤ Better Compatibility:
Developers will improve how SFTs work with other tokens and platforms, making them more widely usable in digital systems.
➤ New Uses:
SFTs will find new roles in the digital market, like owning parts of expensive assets or managing intellectual property rights.
➤ Linking with DeFi:
SFTs will be more connected with decentralized finance (DeFi), opening up new financial services like using SFTs as loan collateral or trading them on decentralized exchanges.
➤ Regulations:
Governments will create rules for SFTs to ensure fairness and safety, providing confidence for users and encouraging more adoption.
➤ Growing Market:
As SFTs become more popular and find new uses, the market for them will expand, attracting more investors, developers, and businesses to join the ecosystem.
To quote famous artist Beeple, "The technology is the same, but the attitude is different." This means while SFTs and NFTs use similar technology, they have different purposes. NFTs are all about being unique, while SFTs offer more flexibility.
As the world moves beyond digital innovations, SFTs could become important in many areas beyond just games and art. They could be useful in real estate, business management, and finance. However, making them widely accepted will need careful attention to rules, technology, and how the market changes. So as we always say, do your research before getting into this SFT development era.
