The phrase “crypto token” refers to a unique virtual currency token or the method by which cryptocurrencies are valued. These tokens are fungible and tradeable assets or utilities with their own blockchains. Crypto tokens are frequently used to raise funds for crowd sales, but they can also be used to replace other items.
The traditional initial coin offering (ICO) method, which comprises a crowdsourcing exercise to support project development is used to produce, distribute, sell, and circulate these currencies.
What are the different types of tokens?
Tokens are broadly classified into three types – fungible token, non-fungible token, and semi fungible token
• Fungible Tokens
Blockchain is regarded as the ideal technology for managing all forms of digital assets due to decentralization, security, and immutability. This would not be practicable with such interchangeable tokens. For cryptocurrencies, such tokens are OK, and in fact, fungibility is a key element of any currency.
Tokens of this type are constructed in such a way that each fraction of a token is equal to the next. For example, Bitcoin, the most widely used cryptocurrency, is fungible, meaning that one Bitcoin is equal to another Bitcoin and all other Bitcoins. It is presumed that such tokens are interchangeable and divisible.
• Non Fungible Tokens (NFTs)
Non-fungible tokens are distinct from fungible tokens in that they represent one-of-a-kind, collectible items. They’re one-of-a-kind since they can’t be divided or exchanged for other non-fungible tokens of the same sort. NFTs can be considered non-fungible tokens that provide a number of unique uses for blockchain technology. The most well-known example of non-fungible, collectible tokens is Crypto Kitties.
Unlike fungible assets like Bitcoin, every CryptoKitty is unique, and no two CryptoKitties are alike; it is impossible to break a CryptoKitty into smaller pieces, exchange them, and reassemble them to make an equally valued CryptoKitty.
• Semi Fungible Tokens (SFTs)
The latest advancement in the ever-evolving field of blockchain technology is a Semi Fungible Token (SFT). SFTs are a development on the base of Non-Fungible Tokens that allow exchanging like a fungible token but become non-fungible once redeemed or sold.
SFTs are a novel type of token that can be both fungible and non-fungible during the course of their lifetime. SFTs work like conventional fungible tokens at first, in that they can be traded like-for-like with other SFTs.
For example, a token representing a valid $40 Super Bowl token would be interchangeable with another token representing the same voucher with the same expiration date.
The feature that distinguishes these particular tokens as “semi-fungible” is that once redeemed, the fungible tokens lose their face value. The non-fungibility of the expiring tokens is due to their loss of exchangeable value.
How SFT Tokens can be developed?
ETH 1155 tokens can be used for SFT token development. The standard was created in 2017 by blockchain game creators Enjin, The Sandbox, and Horizon Games using a combination of ETH 20 and ETH 721 tokens, allowing the token to be generated and managed with a single smart contract.
Can SFT Tokens be developed on any other Blockchain?
MocktailSwap Finance has become the first to use Binance Smart Chain to run the ETH 1155 SFT standard token. Semi-fungible tokens provide the feature to Mocktail, allowing several addresses to possess one token or one address to own numerous copies of the same token, unlike NFT, which only enables one address to own one token. Mocktail’s implementation of BSC allows for faster transaction times and lower transaction costs.
SFTs maybe not be as popular as NFTs right now but they will be having a great future ahead. We know that traders like flexibility and durability in tokens. The dual nature of SFTs makes them more unique and the hybrid qualities of both fungible and non-fungible tokens offer a huge potential to the token developers to jump on this unexplored and untapped bandwagon of SFTs.
If you are planning to build your fungible, non-fungible, or semi fungible token, Antier Solutions can help. We offer comprehensive services – from token conceptualization and design to token development, launch, and marketing – to help you successfully launch your token. Our technical prowess, deep domain knowledge, and breadth of expertise uniquely equip us to smoothly navigate your token development journey.