After the Move smart inscription craze, the innovative prospects of the SFT track

With the rise of Move smart inscriptions, the semi-fungible token (SFT) sector is attracting widespread attention in the industry. As a fusion of NFTs and FTs, SFTs possess unique advantages and immense innovation potential, and are expected to experience explosive growth in the upcoming bull market.

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

The successful implementation of Move smart inscriptions fully demonstrates the container capability of SFTs. Each time an inscription is minted, an equivalent amount of SUI is locked, allowing users to burn it at any time to retrieve their principal while also generating a deflationary effect. This mechanism greatly reduces the risk for participants, offering the opportunity to gain substantial returns with only a small gas fee.

Currently, the SFT ecosystem has made progress in multiple fields. In terms of real-world applications, there are projects collaborating with the central banks of three countries; in the DeFi sector, on-chain fund businesses are flourishing; in the GameFi sector, SFT is used for innovative gameplay such as AI-driven NPC interactions and cross-game point sharing; in the DePIN and SocialFi sectors, several projects are leveraging ERC-3525 to enhance competitiveness.

SFT has many potential directions for innovation in the future:

1. Fully Automated Dividend Agreement: Leveraging the cash flow programming capability of SFT, project parties can sell a portion of future earnings in advance for financing, achieving shared risk. Smart contracts can automatically distribute earnings based on held shares, without considering share circulation.

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

3. Innovative DAO Governance Model: Based on the fair sale of inscriptions and automatic dividend mechanisms, a brand new DAO governance structure may emerge, balancing the interests of early contributors and subsequent participants.

4. Asset Nested Combinations: The "container" feature of SFT makes multi-layer asset nesting possible, such as embedding ETH within SFT, or embedding SFT within SFT, and even designing complex unlocking mechanisms.

The innovation potential of the SFT track is immense and is expected to become an important driving force in the next bull market. Investors and developers should closely monitor the developments in this field and explore more innovative application scenarios.