Non-Fungible Asset

"Non-Fungible Assets" are the real world objects being transacted on within Web2.0 and Web3.0 eCommerce Solutions.  They are a domain representation of the real world object and not a specific technology implementation.

“These assets are unique and one of a kind and require complex valuations based on their unique attributes and scarcity and cannot be exchanged for another item”

For example, diamonds are non-fungible assets due to their uniqueness in size, color, shape and quality.

Non-Fungible Token (NFT)  are unique digital objects that reside on the blockchain.   NFT smart contracts implement behavior associated real-world assets.

Non-Fungible Asset (NFA) Examples

• Precious jewelry sale of specific pieces

• Airline flight ticket for a specific seat

• Metaverse virtual land sale

• Restaurant reservation for a specific table and time

• Vacation rental booking

• Real Estate Sales (property sale)

Asset Definition:

“A resource with economic value that an individual, corporation, or country owns or controls with the expectation that it will provide a future benefit”

Fungible Definition

“Fungible means goods or assets that are not unique and can be exchanged/substituted for another identical asset of an equivalent value”

Non-Fungible Definition (Opposite of fungible):

• Unique

• Irreplaceable

• Non-interchangeable

(good overview)

How you define “value” impacts your definition of Unique, Irreplaceable and Non-interchangeable.  If you see value of a hotel room night stay as simply a place to lay your head for the night then rooms are interchangeable and not unique.  If you see value as that specific 3rd floor room at the end of the hallway with the view of the ocean then that is very unique, and not replaceable with any other room.

Non-Fungible Assets (NFA's) are different from NFT’s, Products, and Product Variants

• Crypto NFT (Non-Fungible Token).  “Token” refers to a blockchain smart contract.  The NFT smart contract is a specific blockchain based implementation.  The NFT is associated with real world Non-Fungible Asset.

• eCommerce Product.  Product is a more abstract concept that can represent many different purchasable items.  A Nike Pegasus 39 shoe (Product) comes in many different lengths, widths and colors.  It does not represent the actual shoe one purchases.

• eCommerce Product Variant.  eCommerce Product Variant is more specific than Product, but does not reference the actual instance of the real-world item.  Variants are usually defined as a set of discrete attribute values (red, green, blue). 

Non-Fungible Asset Domain Model

Other related concepts

• Tokenize Real-World Assets

• Digital Twin

• Dynamic NFT

• Rentable NFT

• Proof of attendance protocol (POAP)

Articles

• https://medium.com/nonfungible/why-most-of-the-definitions-of-non-fungible-are-incorrect-3565fa3cfc66

• https://loftadvisors.com/news/what-are-fungible-and-nonfungible-assets

• https://coinmarketcap.com/alexandria/glossary/non-fungible-assets

Need to blend in concepts of Tokenized Commerce.

Tokenized Commerce: Web3.0 introduces the concept of tokens, which can represent ownership or access rights to various assets. Composable commerce can leverage tokenization to enable new forms of commerce, such as fractional ownership of products, loyalty programs, and rewards systems. Users can combine different token-based modules to create unique commerce experiences.