As the digital asset and blockchain industry evolves, the discussion around NFT versus SFT is gaining more importance. Non-Fungible Tokens (NFTs) and Semi-Fungible Tokens (SFTs) are new methods for handling ownership and transfer within blockchain environments. However, they have different uses and provide unique features. Grasping the distinction between these types of tokens is essential for anyone working with blockchain, cryptocurrency, or digital assets. This article aims to clarify these two token types by exploring the unique features of NFTs and SFTs, and by comparing them within the larger decentralized ecosystem. Key Takeaways. Fungibility is the property that allows an asset to be exchanged one-for-one with another asset of the same type and value, like currency or cryptocurrencies. NFTs signify ownership of unique digital or physical items, such as artwork and rare digital collectibles, with each token being distinctly unique and not interchangeable. SFTs are partially interchangeable tokens that can be split into smaller units, making them ideal for representing assets with shared ownership or divisible amounts. NFTs generally utilize the ERC-220 standard, while SFTs use the more versatile ERC-2721, which supports batch transfers and fractional ownership. Transactions involving NFTs typically require individual transfers, which can be expensive, whereas SFTs can be transferred in batches, lowering costs and increasing efficiency. NFTs maintain their uniqueness throughout their life, while SFTs have the capability to switch between fungible and non-fungible forms. What does fungibility mean? Before we look into and compare NFT and SFT, it’s important to grasp the basic idea of fungibility regarding blockchain assets. In technical language, fungibility means that assets can be exchanged for one another. A fungible asset is one that can be readily swapped for another asset of the same kind and worth, with no distinction between them. For instance, a one-dollar bill is interchangeable because it holds the same value as any other one-dollar bill, and they can be swapped without altering their value. In the realm of blockchain, fungibility is crucial in determining the operation of digital assets. Cryptocurrencies such as Bitcoin and Ethereum are fungible since each unit of Bitcoin or Ether is the same as any other, which facilitates easy trading.