Fungible Tokens
A fungible asset is an asset that can be easily exchanged for another asset. The US Dollar is a good example of something that is fungible as it can be broken up into smaller units or swapped for other currencies.

A fungible digital asset (token) takes on the same principles as they typically have a quantity that is greater than 1 and can be swapped for other fungible digital assets, whether they be tokens on a chain or other cryptocurrencies.

A good example of a fungible digital asset is USDC by Circle. USDC is a stablecoin, which means it is meant to have a constant value of $1 USD. When a user holds 1 USDC, it would be the same as holding $1 in your wallet. Here the USDC can be swapped for other crypto currencies, used as collateral for loans, or used to buy Non-Fungible Tokens.

Non-Fungible Tokens (NFT)
A non-fungible asset is an asset that can’t be easily exchanged for another asset. A home or car is a good example of a non-fungible asset, since you simply can’t trade your home or car for another. You would need to convert it to a fungible asset then use that fungible asset to purchase another non-fungible asset.

A non-fungible digital asset (token) takes on the same principles as they typically have a quantity of 1. 

A good example of a NFT is digital art. With the unique nature of an NFT, the owner would have to list the piece on a marketplace in exchange for a fungible token.

Digital Asset Use Cases

Tokenization
One of the most popular use cases for Digital Assets is tokenization. Here one can take things like digital media files and put them on the blockchain. This allows anyone looking to buy the asset know where it came from to immediately identify if it is real or not. In addition, creators using blockchain technology can use that authentication to only allow assets that meet the proper parameters. Blockchain technology allows a unique way to permit access based on the tokens someone holds.

Real World Assets (RWAs)
Real World Assets are a growing use case for Digital Assets. With RWAs, physical and digital goods can be tokenized onto the blockchain and allowed to be bought and sold freely. Some examples of this are TravelX, which tokenizes airline tickets. When you buy an airline ticket, you also receive a digital token that can be sold freely. Another use case is Lofty, which tokenizes real estate. Here a home or building can be fractionalized into shares that can be bought and sold freely. This allows for people that can’t fully buy a property be allowed to purchase a portion and collect their revenue based on the share they hold.

Stable Coins
One of the most popular RWAs are Stable Coins. With Stable Coins, a real world currency is put on the blockchain 1:1 and is backed by that currency. This allows people looking to dive into the world of cryptocurrencies to not have to worry about the volatile nature of cryptocurrencies. For example, 1 USDC = $1 USD no matter what the price of the cryptocurrency is for that chain.

Article provided by Thurstober Digital Studios, LLC