What is a Semi-Fungible Token?

 All sort of levels of fungibility are now floating about.  Trying to keep it straight.  

What Is a ‘Semi-Fungible’ Crypto Token?

Concert tickets, gift vouchers and coupons are all examples of semi-fungible items.

By Anatol Antonovici  in Coindesk  Aug 17, 2021 

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.

Fungible tokens

The majority of crypto assets investors monitor and trade on a regular basis are fungible, i.e. they are easily interchangeable. For example, if two people exchanged one ether (ETH, +3.59%) for another, there would be no loss of value and neither party would be better off than the other. That is because there is no value distinction between any two ether or any two bitcoin (BTC, +3.46%) for that matter (excluding “tainted coins” – coins that had been previously stolen or used in illicit activities).

Fiat money like U.S dollars are also fungible. In other words, fungibility is the ability of a token (or currency) to be exchanged or replaced with other tokens of the same type resulting in no change in value.    ... '