Original author: jolestar (X: @jolestar)
Editors note: What is the application significance behind the craze for graph-to-coin conversion? Crypto researcher jolestar (X: @jolestar)Post a messageDiscussed the logical dilemma behind the Token Conversion Agreement, and expressed that the dual nature of SFT can naturally connect to different liquidity markets. If NFT is replaced by SFT, the logical dilemma may be solved.
I have been struggling with the Movescription to Coin conversion protocol for a few days during the holidays, and I have been thinking about the application significance behind this wave of graph (NFT) currency (FT) conversion craze.
If we consider it purely from a financial scenario, the goal of NFT to FT conversion is to allow the same asset to bridge two liquidity markets at the same time to meet different transaction needs. The entire Crypto is now facing a conflict between two different trading needs. One is Builder and Holder. They can hold it for a long time and have the patience to wait for application scenarios. Their demand for liquidity is not that strong. The other type is Trader, which requires high-frequency short-term trading, pursues hot spots, and relies on high liquidity. If an asset only has the former without the latter, it will be difficult to maintain a tradable market and it will be difficult to develop an ecosystem. But if there is only the latter without the former, then it is probably just a wave. The Token Conversion Protocol attempts to find a new model in this direction.
But once the conversion from NFT to FT is bound to a specific application scenario, the logical dilemma behind it is discovered. What is the application significance of the conversion from FT to NFT? Lets take a typical text NFT, such as a domain name, as an example. When the user converts the FT into an NFT, will he get a random domain name? So FT here represents a random expected value of NFT? Whats more, this kind of randomness is not that easy to implement on the chain. In many cases, the users conversion can be predicted. Even if this is true, it is just a issuance strategy of randomly minting NFTs through FT, and users will gradually withdraw scarce NFTs from the pool, and the overall expected value of the pool will decrease.
And if we replace NFT with SFT, the above logic will make sense. The semi-homogeneity of SFT has the characteristics of both FT and NFT. It has duality and can naturally connect to different liquidity markets. And the assets it expresses are often not so unique as NFT. For example, membership cards with stored value, a set of resources in the game (wood, minerals, etc.), bonds with face value and expiration time, shares with governance rights. When this asset is expressed as SFT, it has application value. When converted into FT, it is equivalent to giving up application value and gaining liquidity. The demand for uniqueness is not that strong. When converting to SFT, just recast one, such as a membership card. FT can be naturally converted into the amount in the membership card. This isolates different types of users through different assets and trading markets, allowing operations to be targeted.
One of the key differences between Movescription and other SFTs is that it realizes the nesting of assets through the composability provided by Move. In addition to allowing users to get back the casting fees when burning and achieving a minimum guarantee, what other possibilities does this nested value have? This is also what the community has been discussing. When implementing the conversion protocol, we found that it is naturally an expression of swaps liquidity provider asset (LP). Users can directly deposit Movescription as LP into swap without looking for additional liquidity support. Liquidity guarantee.
It feels like we are about to find the DeFi moment of Inscription → Smart Inscription → SFT.
Related Links:
IOS
Android