NFTs (non-fungible tokens) - a new technology to represent digital assets - are now becoming more and more popular with many applications. They are reliable because of their immutability which means they cannot be changed or altered once minted on a blockchain.
However, the feature also brings users some disadvantages. Particularly, NFTs are now mostly used in Gaming and in-game items are usually designed to be upgraded while static (traditional) NFTs do not allow changes to be made. That's why we need Dynamic NFTs or dNFTs.
What is a Dynamic NFT?
Dynamic NFTs are the NFTs that can change their characteristics when some specific conditions in the smart contract are met.
Most NFTs we see today are static NFTs minted on the Ethereum blockchain under the standard of ERC-721. These tokens are locked on the blockchain and cannot be altered, which is a big advantage but also brings some drawbacks as mentioned above.
Therefore, a new standard - ERC-1155 has been issued to define Dynamic NFTs which can be changed due to what is written in the smart contract.
Prominent features of Dynamic NFTs
An evolution of traditional NFTs
Inheriting traditional NFTs’ characteristics such as uniqueness, security, sustainability, etc., Dynamic NFTs have an advanced feature: storing content that can be updated based on external triggers.
Automated updates by oracles
Smart contracts are known for their automatism; hence, every update of Dynamic NFTs is automatedly operated. E.g. Blockchain oracles or APIs are used to update football scores to Dynamic NFTs.
An encouragement for creativity
Since Dynamic NFTs do not restrain the content that they store to be in the same state over time, they stimulate creators’ creativity to make more amazing works.
How a Dynamic NFT works
Every NFT has its own metadata. For static NFTs, the metadata cannot be changed. In contrast, Dynamic NFTs allow the metadata to change and therefore change the characteristics. The NFTs will change due to the conditions that are set in the smart contracts when those NFTs are minted.
Use cases
Gaming
Dynamic NFTs make a huge contribution to the development of play-to-earn (P2E) games as they allow gamers to make an effort to upgrade and change their NFT in-game items and sell them to make profits.
Collectible
Artworks will be more interesting to collect when they can change over time. For instance, the Organic Growth: Crystal Reef is an NFT project created by Michael Joo, Danil Krivoruchko, and the OG: CR community.
On the initial sale, the Dynamic NFTs are the "seed crystals". Every time that NFT is sold, the crystal will grow with each stage of the growth being saved in separate files for everyone to observe. After three months or seven times the NFT is sold, the crystal's shape is "locked".
Passport
NFTs are well known for their immutability and security so they are used for storing documents like identity cards, certificates or licenses and so on. With Dynamic NFTs, we can store more documents that change over time on the blockchain, particularly passports. People can have their immigration stamps issued on their NFTs passports conveniently and safely.
Sports
In sports, for example, NFTs are used to represent cards that display football players and their statistics such as the goals scored throughout the seasons. These cards are designed for users to track and complete the statistics about the players. Therefore, the NFTs used to represent them need to be “dynamic” - able to be altered.
How to get Dynamic NFTs
Polygon (formerly MATIC network), which is known for its powerful decentralized oracle networks (DONs), is a fast and cost-effective platform where you can create your own Dynamic NFTs. Besides, Dynamic NFTs are now sold on big marketplaces like Opensea.
Bottom line
Dynamic NFTs are an advance of blockchain technology in storing information and digital assets. Although they are still new and not as popular as traditional NFTs, their use cases are wide and practical. Dynamic NFTs will soon be applied in many fields especially in interacting in the Metaverse.