If the vibrant, modern, future of NFTs is centred around the powerful combination of creators and community then how can dynamic NFTs help us to cement the long-term utility of NFTs into the minds of the eagerly awaiting public?
I sat down with Ilya Zhurin, product lead at OG Protocol, to learn about the potential of dynamic NFTs and how non-fungible technology is disrupting our interactions with all assets. Zhurin has been travelling around the world for the last 10 years. He comes from a background in traditional finance and trading.
So what are dynamic NFTs?
“These are entities that can change and evolve based on different parameters, different rules and different data points. It can be anything from real-life data such as weather forecasts or sporting results,” says Zhurin.
He explains that OG Protocol helps projects with technology that enables them to have these dynamic evolutions as part of their NFTs.
NFT technology today is already widely known for assisting brands to build loyal, committed communities. The power of some NFT communities has seen sub-brands, circular economies and large-scale ecosystems build up throughout Web3 ecosystems.
For many projects within the world of Blockchain, the community is key to unlocking the potential of a product or service. Zhurin explains that they see “dynamic technology as a great way to unlock virtually limitless community building mechanisms because dynamic NFTs that can evolve based on every individual community member's contribution to that community.”
Analysing how different members of a community participate and rewarding community contributors appropriately allows community managers to engage with members like never before.
“We can track the data; what person does for the community, how active they are, how engaged they are, how much they do for the community and how much they participate.”
Developing effective reward programs for devoted contributors
Creating reward-based incentives with this data is a powerful tool for founding teams who are in the development stage but also for some larger projects who may find it difficult to maintain momentum and drive consistent incentives for participation. With dynamic NFTs community members are empowered to take action.
“Let's say everyone in a community has an NFT and their NFT changes based on what they do in that community. The more a person does, the more their NFT evolves, and the more beautiful it may become.”
Not only can this technology alter the metadata of the NFT, it can also change the visuals to make it more or less appealing. This altered NFT can highlight how active a person is within a community or if a person is dormant and doesn’t participate at all.
Immediately, the silver and gold stars we received as children in school popped into my mind. Reward-based incentives are nothing new. However, NFTs now provide us with a unique way to reward adults who often provide time and resources to causes and projects that may currently lack any personal benefits.
Taking the gold star metaphor a step further, what if gold stars were the top NFTs for the best performing educators in a Web3 ecosystem that had a treasury devoted to education? The value of these star NFTs automatically increases dramatically and the incentive to claim these stars is born.
Zhurin is quick to showcase his enthusiasm for this method of rewarding community participants.
“The main benefits of dynamic entities is that you can reward people. It obviously depends on the project and what type of utility they want to provide for their community but dynamic NFTs are a great tool to track who contributes to the community and reward those people with tiered benefits.
“When your best contributors perform and make huge differences to your community engagement, dynamic evolving NFTs allow you to track this data and encourage others to be more active, as well as join the community.”
Today, OG Protocol believes it is important to partner with smart teams, like Unique Network that are responsive and happy to collaborate, explain and show how their network works.
“With Unique we have a smooth and easy integration. This is a network that specialises in that focusing on providing benefits for NFT creators. And they have multiple tools. Dynamic NFTs are one of the new and key components of NFT creation.”
A community-first approach to all NFT projects
I asked Zhurin what is the one piece of advice he would give to an individual or organisation hoping to launch an NFT project in the near future. His response was centred around a community-first approach.
“I believe that now people have become more conscious. The focus is changing from an NFT as a JPEG to NFT as a tool that enables projects to create communities. So the focus shifts from the gangs where everybody's making tons of money to the actual utility and use cases of NFTs.”
For individuals and teams considering launching NFTs now, Zhurin believes in a community-driven approach. Asking ourselves how can this new technology make existing products and services ten times better than before is key.
“The first thing I would look at and try to understand is, what type of community do you want to build?”
Many existing projects and brands hoping to embark on their journey into NFTs don’t need to think about NFTs initially. For Zhurin, they can start by creating a community around something that they like or find exciting. That is step one.
“Step number two is to listen to your community, either do it yourself or hire good community managers who would be able to engage with people and get feedback. This is the difference between Web2 and Web3. In Web2, a company creates an MVP and then shows it to people with ads. However, there is no effective community talking about the product constantly.”
This is one of the most valuable attributes of working in Web3. Teams have the opportunity to listen to the community and build the product around that particular community's needs and wants.
“When you understand how NFTs bring value to that community, which could be token gated access to a platform, then projects can start thinking about the benefits of that NFT and use NFTs as a way of collaborating rather than an investment tool.”
The OG Protocol team are currently working on some interesting use cases. Charity is one that sticks in Zhurin’s mind as it is a combination of art and community building that fits with the purpose behind the creation of the technology. If a user understands that they are helping somebody improve another’s life then it is the perfect place to trial dynamic NFTs.
Any platform where the user can engage and see that their activity within the app is rewarded, is an ideal area to use the feedback loop that dynamic NFTs can provide.
OG Protocol has recently partnered with Unique Network to build out their dynamic NFT infrastructure and showcase the potential of this new technology. I told Ilya that I would be happy to get the first NFT silver and gold stars into the classrooms.