What are Non-Fungible Tokens (NFT)?
Cryptocurrencies otherwise referred to as digital tokens can be categorized into two broad categories namely fungible tokens and non-fungible tokens.
Fungible tokens are identical; meaning that one token has features that are exactly similar to the other as long as they are called the same name. For example, one Bitcoin owned by a person A will have similar features as another Bitcoin owned by a person B. Therefore, they can be swapped like for like. Also, they are divisible; meaning a person can send or receive a fraction of a fungible token.
Non-fungible tokens (NFT) on the other hand are not identical; meaning no NFT has features that are similar to another. Each non-fungible token has identifying information that is stored in smart contracts written for them. Therefore, one NFT token cannot be swapped like for like the way banknotes are exchanged if they are of the same value. Also, they are not divisible like the fungible tokens and can therefore only be transferred in whole numbers.
Therefore while a person can for instance buy 0.001 ETH, which is a fungible token, it is impossible to buy such an amount of a non-fungible token. A person can only by 1, 2, 3, and 4… etc. amount of non-fungible tokens.
How non-fungible tokens are used
NTF tokens are slowly gaining popularity among blockchain industry especially because they can be linked to actual assets and they can also be used to trace the actual ownership of a digital work like art. Some of the main use cases of Non-fungible tokens include protecting the copyrights or digital artists, creating collectables e.g. using CryptoKitties, computer in-game purchases, proof of ownership of real-world assets and decentralized finance (DeFi).
The DeFi market is turning to be one of the most rapidly growing blockchain market and various projects have banked on using non-fungible tokens for their DeFi projects. A good example is KingSwap, which is one of the newest Ethereum based DeFi liquidity pool platforms. KingSwap is registered and regulated in Singapore.
KingSwap forked from the Uniswap protocol and introduced additional features like liquidity pool migration, layer 2 and layer 3 implementations, and off-ramp fiat conversion improvements to allow greater user experience and convenience between fiat and cryptocurrency worlds. It also has some new blockchain community-oriented features like pool rewards and network effects that ensure user-friendly real-time benefits in terms of contributor rewards and price curves.
KingSwap NFT token ticker name is $King and there are 3 Tiers of $King NFT token namely King Vampz, Queen Sparkle and Knight Lancelot that offer buyers loyalty rewards from the tokens being issued by the project. Holders of the King Vampz get a 60% allocation of KingSwap project rewards, Queen Sparkle holders get a 30% allocation while the Knight Lancelot holders get a 10% allocation.
In addition to loyalty rewards and offering holders a chance to participate in the governance of the platform, the $King NFT tokens are designed on High Yield Staking LP Token Model that allows holders to get rewards for liquidity mining.