Fungibility has been a consistent theme of 2021, following the meteoric rise of NFTs. But what’s the deal with “semi-fungible” tokens and how do they work?
The interest surrounding non-fungible tokens (NFTs) reached astounding levels in the first half of this year. Data from NonFungible showed NFT sales surged to over $2.4 billion in the first quarter – 20 times more than the previous three months. That momentum has showed no signs of slowing so far in the second half of the year, with the leading Ethereum-based NFT marketplace, OpenSea, experiencing a record high trading volume of $49 million on Aug. 1, up from its average daily average trading volume of $8.3 million. The average price of CryptoPunks – one of the first collections of NFTs to make their debut on Ethereum’s blockchain – also set a record during the same month of 66.919 ETH per NFT (about $220,000 at press time).
The explosive growth has kickstarted a new wave of innovation around non-fungible assets, including the emergence of a new type of “semi-fungible” token (SFT) that starts off fungible and becomes non-fungible. Let’s break down these terms.