What is a Semi-Homogeneous Token (SFT)? From concept to application, can SFT become the next stage of NFTs?

As NFTs transition from the boom period to a cooling-off phase, the market is beginning to reconsider a question: do on-chain assets necessarily have to choose between “full fungibility (FT)” and “full non-fungibility (NFT)”?

In this context, Semi-Fungible Tokens (SFT) are gradually entering the vision of developers and the market, being seen as an intermediate form connecting FT and NFT.

SFT is not a brand-new concept, but the asset design approach it represents is increasingly needed across various application scenarios.

1. What is a Semi-Fungible Token (SFT)?

A Semi-Fungible Token (SFT), as the name suggests, is an on-chain asset that possesses both fungible and non-fungible characteristics during its lifecycle.

Simply put, SFTs can be interchangeable at certain stages (like ERC-20), but under specific conditions, they transform into unique, non-interchangeable assets (like NFTs). It is not fixed as “semi-fungible,” but changes based on usage scenarios and states.

The most typical understanding is:

SFT is a “state-variable” token.

For example, an unused ticket can be exchanged with other similar tickets; but once used or bound to specific rights, it becomes a unique asset that cannot be equivalently exchanged with other tokens.

2. Background of SFT’s Emergence: Structural Limitations of FT and NFT

The emergence of SFT is not accidental but a response to the limitations of existing token models.

In traditional FT (Fungible Token) models, all tokens are identical, suitable for payments, settlements, and value storage, but unable to carry complex attributes or state changes.

NFTs (Non-Fungible Tokens), while capable of expressing uniqueness and scarcity, reveal issues such as low liquidity, high management costs, and difficulty in batch operations in practical use—especially unsuitable for high-frequency, staged assets.

In many real-world and on-chain combined scenarios, assets often exhibit a characteristic: “Standardized at one stage, personalized at another.”

It is in response to this demand that SFT, as a more flexible asset form, has been proposed and adopted gradually.

3. Representative SFT Standards and Token Practices

Currently, the most representative SFT technical standard mainly comes from the Ethereum ecosystem.

ERC-1155: The most classic implementation of SFT

ERC-1155 is widely regarded as a standard for SFT. It allows both fungible and non-fungible tokens to coexist within the same contract and supports switching tokens between different states.

ERC-1155 was initially widely used in blockchain games, such as game items, equipment, consumables, etc. These assets can exist in bulk before use; once bound to a character or consumed, their attributes change.

Typical applications of SFT form

Although the market rarely labels “this is an SFT token” directly, the following scenarios widely utilize SFT logic:

• Blockchain game items and equipment
• Tickets and passes (Event / NFT Ticket)
• Upgradable or consumable NFT assets
• Membership certificates with phased unlocking rights

These assets do not fully conform to traditional FT or NFT definitions but are highly consistent with SFT logic.

4. Core Advantages and Application Value of SFT

The greatest value of SFT lies in its high adaptability to real-world assets and complex on-chain behaviors.

First, SFT significantly improves asset liquidity efficiency. Before entering the personalization stage, they can be traded and managed in bulk like FT.

Second, SFT naturally supports state changes and lifecycle management, making on-chain assets no longer static entities “once minted, never changing.”

More importantly, SFT provides a more realistic business logic-aligned asset expression for Web3 applications, enabling greater design space for scenarios like membership systems, subscription services, and rights certificates.

5. Future Development Trends of SFT

From a trend perspective, SFT is more likely to develop as a “bottom-layer asset form” rather than an independent narrative track.

On one hand, as the NFT market gradually shifts from “collectibles narrative” to “functional assets,” the demand for flexible models like SFT will continue to rise.

On the other hand, sectors such as blockchain games, AI Agents, and RWA (Real-World Asset on Chain) inherently rely heavily on state changes and rights evolution, providing natural landing spaces for SFT.

It should be noted that SFT itself will not become a standalone speculative hotspot; its value is more reflected in being integrated and used rather than being individually hyped.

Summary

Semi-Fungible Tokens (SFT) are not meant to replace FT or NFT but to fill the gap between the two. They provide Web3 with a more flexible, more realistic asset expression method.

As on-chain applications shift from “concept-driven” to “function-driven,” SFT is likely to gradually become the default choice for many applications without being frequently mentioned. For users and developers, understanding SFT may be more meaningful in the long term than chasing a specific token.