SFT assets may become a new hotspot in the next bull run, with huge potential for innovative applications.

Recently, with the explosive popularity of Move smart inscriptions, the SFT (Semi-Fungible Token) asset track has drawn widespread attention. As a combination of NFT and FT, SFT has unique characteristics and broad application prospects, and is expected to shine in the upcoming bull run. So, what exactly is SFT? What innovative spaces can it bring to various tracks? Why is it worth paying special attention to in this bull run?

SFT originated from Ethereum's ERC-3525 standard and officially became Ethereum's new token standard in September 2022. Although it was born during a bear market, its enormous potential has yet to be fully explored. SFT can be understood as a combination of NFT and FT, a super NFT that has the ability to split and combine, while also offering greater innovation space and combinability than traditional NFTs and FTs. The uniqueness of SFT lies in its "container" property and cash flow programming capability, making it particularly suitable for complex asset structure design in the finance and gaming sectors.

The container capability of SFT is fully reflected in Move inscriptions. Each time an inscription is minted, an equivalent amount of SUI is locked as the minting fee. Users can burn the inscription at any time to retrieve their principal, while also causing a certain degree of deflation. This mechanism ensures that first-level participants almost never lose money; they only need to spend a minimal gas cost to have the opportunity to obtain considerable returns. The non-zero characteristic also stimulates more people's enthusiasm to participate.

Currently, the SFT ecosystem has made progress in multiple fields. In terms of real-world applications, projects have already collaborated with the central banks of three countries to promote the application of Web3 technology in practical scenarios. In the cryptocurrency sector, the DeFi project Solv utilizes SFT to develop on-chain fund operations, becoming a leader in the decentralized asset management track, with asset issuance scale exceeding 100 million USD. In the GameFi field, multiple projects have implemented innovative gameplay using the ERC-3525 standard, such as AI-driven NPC interactions with player assets and cross-game point sharing. Projects in fields like DePIN and SocialFi are also exploring the application of SFT to enhance competitive advantages.

There are many potential application scenarios for SFT, and here are a few innovative directions worth paying attention to:

1. Fully Automated Dividend Agreement: By utilizing the cash flow programming capabilities of SFT, project parties can sell a portion of future cash flow revenues in advance for financing, achieving risk sharing. Smart contracts can automatically distribute profits based on the holders' shares, without needing to worry about the circulation of shares. This financing method may shine during a bull run.

2. Web3 Fan/Creator Economy: SFT provides a more flexible asset structure for the SocialFi track. By issuing multiple types of "NFT" through a single contract, it facilitates collaboration among different creators and the distribution of fan benefits. The automatic dividend feature of SFT also makes it easier to allocate benefits based on fan contribution.

3. Innovative DAO Governance Model: Based on fair issuance of inscriptions and an automatic dividend mechanism, a brand new DAO governance structure may emerge. For example, a DAO could be established through the issuance of smart inscriptions for fundraising, determining the initial profit distribution based on the financial contributions of early members, and designing mechanisms to incentivize future contributors.

4. Asset Nested Combinations: The "container" characteristic of SFT makes multi-layer asset nesting possible. For example, ETH can be loaded into SFT, SFT can nest SFT, and even complex structures can be designed that require the burning of specific SFTs to unlock internal assets.

In summary, the SFT track has immense innovation potential and is expected to become a significant investment hotspot in the upcoming bull run. Whether from the perspective of technological innovation or the expansion of application scenarios, SFT is worth close attention. However, investors should remain cautious and conduct thorough research and risk assessment.