We have already discussed NFTs many times. But do you also share a familiarity with SFTs? What are they? How have they evolved? What are their purposes and uses? Continue reading this blog to get a detailed overview of SFTs development and their implications.
What are SFTs?
Semi-fungible tokens (SFTs) hold the combined characteristics of fungible and non-fungible tokens. This is the latest innovation made by Solana Blockchain. At present, these tokens are being used in the metaverse and gaming development. The future is expected to have diverse uses of SFTs in multiple sectors.
How have SFTs evolved?
How are SFTs different from fungible and non-fungible tokens?
At a certain point in their lifecycle, SFTs exhibit similar qualities to fungible and non-fungible tokens. SFTs function similarly to fungible tokens and can be exchanged easily with identical ones without impacting their value. Once SFTs are used, they lose their exchange power and attain attributes similar to nonfungible tokens.
What are the main advantages of using SFTs over NFTs?
SFTs are the most preferable to NFTs due to several verified and certain reasons. They are more efficient, cost-effective, and flexible while offering secured transactions.
The most valid and significant advantage of using SFTs is their tokenized transactions. If the addresses are incorrect, then it reverses and refunds the transaction.
More efficient and cost-effective
SFTs enable multiple token transfers in a single program call, save time, and lowers transaction fees.
SFTs enable secure transfers by improving the pre-existing patterns and standards set for NFTs.
How SFTs Work?
Currently, SFTs are working in the field of gaming and the metaverse based on in-chain activity and game assets. Read more about two examples where SFTs are functional and impactful.
1: Genopets SFT
Genopets is an NFT game based on the Solana blockchain and employing both NFTs and SFTs. Players can invest in NFT and other abundant resources like crystals, water, wood, metal, etc. They are all available as SFTs.
SFTs are used in NFT gaming as they enable players to buy and sell multiple assets with one single transaction. Fungible tokens accommodate multiple assets in a single program, resulting in lower congestion and fewer transaction charges than standard NFTs.
2: Gaming Achievement
SFTs sometimes act as good drivers because they can save gaming history easily. Like in gaming, SFTs are enabled to gain characteristics and make unique items that are record-breaking in game history. As the item changes its destination, the new history gets stored automatically.
How SFTs function on Solana?
On Solana, SFTs work in a unique way, where metadata gets attached to a token by representing the game or metaverse environment. The functioning of SFTs on Solana is based on the blockchain’s unique architecture, division of logic, and distinctive components.
What kind of programs and accounts run on Solana?
Solana is generally divided into two distinctive components called programs and accounts. Programs in Solana interact with data accounts and have the ability to mutate external data and unlink variables like Solidity smart contracts.
The structure of Solana makes programming more performant by allowing it to run in parallel by accessing multiple accounts. Having separate code between executable and data accounts makes Solana a more modular and secure platform.
Solana accounts store bytes at a particular address. And that address can be easily defined as the public key of the cryptographic pair. The newly created accounts are initialized with the owner’s account. Some programs define the structure of the data allocated to the account and are responsible for providing instructions to the account.
Types of accounts on Solana
- Mint Accounts: Solana’s Mint accounts store all global information about tokens within themselves.
- Token Accounts: These token accounts enable a smooth relationship between a user’s wallet amount and their Mint account.
How are program-derived addresses different from Solana’s accounts?
PDAs are algorithmically derived account addresses from public key programming. In PDAs, the accounts are destined to control specific programming at each address. It is not possible to generate a PDA from two sources of programming.
PDAs have some relevant uses; they allow cross-program invocations, enabling the creation of multiple accounts and deriving them deterministically.
How does the Token Metadata program belong to Solana?
Token metadata programming intends to allow the inclusion of additional metadata. Mint accounts are generally limited in the amount and kind of data they store. The token metadata program is a portion of the Metaplex protocol that was once designed to ease the creation of NFTs on Solana.
Mint accounts generally store a few attributes related to tokens, current supply, and authorities. They don’t have a hold over data applications and marketplaces. Overcoming the limitation, the Token Metadata program offers a metadata account located at a PDA derived from addresses. The metadata account incorporates several attributes and regular on-chain tokens into digital assets.
What is the JSON standard?
The JSON standard is a process to add data to tokens and store them off-chain, saving the fees involved. URI attributes Metadata Accounts link to off-chain JSON, which is useful and follows certain standards. Ensuring JSON files cannot be updated, they can be easily stored using a permanent solution like Arweave.
What are the applications of the Token Metadata Program to SFTs on Solana?
Token metadata ensures the effective implication of SFTs development on Solana for gaming or the metaverse environment. In Solana, semi-fungible tokens consist of a mint account and have two properties.
- It allows a supply greater than or equal to zero.
- It offers no decimal places.
What are the prospects of SFTs in Web 3.0?
SFT’s hybrid nature seems to open several new possibilities for how tokens can be used to represent the complexity of assets. It ensures the cost-effective, functional, and relevant use of SFTs in the marketplace.
Presently, it’s evolving for better gaming and metaverse use cases. SFTs are attracting a lot of attention due to their flexible and opportunistic features. It regulates cost reduction by improving chain data storage.
1: How to develop SFTs
SFTs can be easily minted on multiple blockchains. Ethereum’s request for comments (ERC) ensures data standardization for SFT development. Enjin, Sandbox, and the Horizon games introduce ERC standards by mixing NFT and FTs.
2: What are the advantages of SFTs?
Flexibility: SFTs exhibit more flexibility than fungible and non-fungible tokens. It allows SFTs to easily develop code and players to buy gaming assets.
Utility: SFTs use multiple sectors digitally. Blockchain facilitates the history-saving and value-processing of particular tokens.
Liquidity: SFTs value remains impactful even after trading with another individual. It offers more liquidity than assets.
3: What is the difference between SFT and NFT?
Semi-fungible tokens can be interchanged initially, but non-fungible tokens cannot. SFTs are a combination of FTs and NFTs; they are useful for batch transfers
of FTs and NFTs.
I am the CEO and founder of Blocktech Brew, a team of blockchain and Web 3.0 experts who are helping businesses adopt, implement and integrate blockchain solutions to achieve business excellence. Having successfully delivered 1000+ projects to clients across 150+ countries, our team is dedicated to designing and developing smart solutions to scale your business growth. We are focused on harnessing the power of Web 3.0 technologies to offer world-class blockchain, NFT, Metaverse, Defi, and Crypto development services to businesses to help them achieve their goals.