SFT: A Crypto Asset that is Gaining Traction

SFTs will continue to revolutionize the digital assets market by bringing new levels of liquidity and accessibility to crypto protocols.

Solv Protocol Team
Solv Protocol
Published in
4 min readJan 13


Hello Solvians,

Another January rolls around, it’s natural to feel excited for what’s to come. In reflection, we experienced a successful bull run for crypto and ended the year with a visit from the bear forcing the industry to reckon with objectivity and face some dark realities.

With a big boost in global crypto market cap this past week, we’ve noticed the attention to the market has returned with a shift towards projects with true innovation, including SFTs, receiving mainstream recognition.

In this newsletter, we’d like to share some external perspectives on SFT, its ecosystem advancement in the past two weeks, and our recent approaches to utilizing SFTs.

Industry Recognition

We’ve seen a surge of mainstream attention in SFTs and in Solv Protocol solutions in recent weeks, including:

  • One of the largest cryptocurrency exchanges in the world, BitFlyer, included SolvProtocol and ERC-3525 token standard on the watchlist of “Web3 Research 2023,” in their annual report.
  • Exodus wallet released a new video featuring Layah Heilpern talking about ERC-3525, ERC-1155, NFTs, and their use cases.
  • Various community members have created videos, articles, and social media posts about SFTs and Solv Protocol solutions.

SFT Ecosystem Updates

Wallet Support for SFT Continues to Grow

Users of Zerion wallet now can add, store and track their SFT assets in their wallet.

Additionally, the industry led wallets to support SFTs continues to grow.

Analytics — Total Volume is 29x’s higher than 2021

Solv data clearly demonstrates that the SFT market has experienced substantial growth in trading volume since May 2022, with the total volume for the year being 29 times higher than that of 2021.

You can track SFT data on these data websites.

Why SFT Stands Out Among Crypto Assets

The scene: Imagine having a dynamic and liquid SFT in your wallet that records your credit assets, bonds, or some other type of points. You can easily transfer a fraction of it to meet cash flow needs or hold onto it as a form of investment.

Existing SFT technology and infrastructure is already capable to make this a reality today and this is the main reason SFTs are gaining popularity in the market. To better understand and utilize the SFTs potential, here are their key features:

  1. Semi-Fungibility: SFTs have a unique ID and rich metadata that allows for complex information to be described, yet they are also fractionalizable, similar to an ERC-20 token.
  2. Digital Asset Container: SFTs can hold any type of digital asset and allow for direct sending and receiving of these assets.
  3. Intelligence: SFTs can interact with a complex environment and execute code when triggered by messages or transactions.
  4. Structured Finance-Ready: SFTs can structure any assets within themselves regardless of token type or fungibility.
  5. Expressiveness: SFT users can directly access real-time on-chain data about a financial position via the self-generated SVG.

A Case Study: What Might a Next-Gen Digital Asset Look Like in Practice?

SFTs will continue to revolutionize the digital assets market by bringing new levels of liquidity and accessibility to crypto protocols. At Solv Protocol, we’ve been leveraging this technology to develop several innovative SFT solutions, including:

  1. Vesting SFT: A widely-used SFT that helps manage and distribute allocations.
  2. Bond SFT: An SFT debt instrument that allows DAOs or institutions to raise capital by issuing a convertible bond, after removing the embedded convertibility feature to create a pure debt instrument.
  3. Convertible SFT: A structured product with similar convertibility features to the Bond SFT, but with a flexible payout mechanism based on the future market price of the underlying asset and a predefined price range.

This year, there will be more SFTs to come! Stay tuned.

Stay Ahead of the Game: Keeping You Involved in SFTs

If you’re interested in experiencing existing SFT products, you can visit Solv Finance. If you have any questions, please join the Solv community . We’ll be happy to answer them for you.

If you’re looking for ways to utilize SFTs to enhance your products or bring your entrepreneurial ideas to fruition, reach out to ming@solv.finance. We believe that more flexible token standards and the next generation of digital assets will become the foundation for creating new products.

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