Non-fungible tokens, or NFTs, did not waste any time in gathering the attention of the tech community and the world. NFTs are finding many applications in mainstream domains, particularly with many high-profile celebrities coming up with their personal NFT collections and projects. Amidst the growing hype around NFTs, the discussion on dynamic NFT examples has also gained formidable momentum.
The constant evolution in the technology underlying non-fungible tokens has created the ideal foundation for introducing dynamic NFTs. Therefore, the interest in dynamic NFTs and their potential for the future of NFTs is reasonable to a certain extent. The following post serves you an introduction to dynamic NFTs, their working and their differences from static NFTs. In addition, you can also learn about the possible use cases and examples of dynamic NFTs.
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What are NFTs?
The first thing in any dynamic NFT tutorial would focus on a brief explanation of NFTs. NFT, or non-fungible token is a basically unique digital asset represented on a blockchain. Every NFT is unique and features a distinct contract address alongside a token ID. In addition, non-fungible tokens also allow the flexibility for attaching data, files, links, images and other information with the token metadata.
Non-fungible tokens have the capability of representing virtually as well as physical assets. It is also important to note that the token ID and metadata are registered permanently after minting an NFT. Therefore, you can consider NFTs as inherently static by design. Considering the wide array of use cases of NFTs and their exclusive value advantages, it is reasonable to wonder about the need for dynamic NFTs.
What Are Dynamic NFTs?
After a brief overview of the definition of NFTs, you must be curious about answers to what is dynamic NFT and their uses. However, the pressing concern right now would point at the reasons for making NFTs dynamic. The need for introducing the dynamic element in NFTs would focus particularly on different use cases where NFTs can respond and react to changes in external conditions. With a dynamic NFT, the changes in metadata of a token become easier.
You can think of applications of dynamic NFT or DNFT in progression-based games with NFTs as in-game avatars. The in-game avatar NFTs store the skills and traits of the avatar in the token metadata. Now, players would need upgrades in their avatars as they move up through different stages of the game. In such cases, dynamic NFTs could help players retain the unique identifier for their in-game avatar while offering the flexibility for modifying or updating different features of the token metadata according to specific conditions.
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Difference between Static and Dynamic NFTs
The basic definition of dynamic NFTs serves a credible impression of their relevance in the rapidly evolving world of NFTs. At the same time, it is also important to note that dynamic NFTs are in competition with static NFTs. Each type of non-fungible token has its share of advantages and disadvantages, depending on the use case. The difference between static and dynamic NFTs could help you understand whether dynamic NFT art use cases are reasonable in comparison to static NFTs. Wont they lose credibility? The following pointers separating static and dynamic NFTs could provide some clarification.
Static NFTs are basically digital assets with permanent token data. Therefore, they can provide better assurance of security and trust, albeit sacrificing flexibility. On the other hand, dynamic NFTs offer the flexibility for changing the token metadata. However, the flexibility of dynamic NFTs comes at the risk of increased vulnerabilities in comparison to static NFTs. Therefore, dynamic NFTs are more eligible for use cases that require frequent changes in data.
Working of Dynamic NFTs
The outline of the prominent difference between static NFT and dynamic NFT serves further clarity regarding dynamic NFTs. The next important highlight you need to take into account would refer to the working of dynamic NFTs. An overview of answers to How does a dynamic NFT work? would show you how non-fungible tokens can be tailored for flexible modifications in the token metadata. The core element underlying the operations of dynamic NFTs would refer to smart contracts.
Smart contracts are integral requirements for ensuring changes in dynamic NFTs through on-chain as well as off-chain computation. Upon requesting a dynamic NFT, the smart contracts would evaluate the on-chain and off-chain data to determine the response. Therefore, the changes in dynamic NFTs depend on the conditions outlined in the smart contract. You can learn more about the working of dynamic NFTs with the following simple steps.
- The smart contract receives a request for the dynamic NFT and starts processing the request.
- In the second step, the smart contract invokes on-chain data and evaluates the information available on the blockchain.
- Now, the smart contract would leverage an oracle for calling off-chain data and then processing the offline information.
- Depending on the results of evaluation of on-chain and off-chain data, the smart contract would return a specific type of media.
The working of different dynamic NFT examples would show that smart contracts are essential for NFTs. On top of it, smart contracts could determine whether an NFT should be changed and ensures modification in the token metadata of the dynamic NFTs. Most important of all, dynamic NFT smart contracts rely on on-chain as well as off-chain data for reflecting accurate changes.
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Application of Oracles in Dynamic NFTs
The understanding of how dynamic NFTs work revolves primarily around updates to metadata. On the other hand, you can also look up possibilities for introduction of dynamic features. In some cases, DNFT applications can call for development of dynamic NFTs upon meeting certain conditions.
For example, dynamic NFTs can be created upon discovery of secret locations in an augmented reality app. Furthermore, dynamic NFTs could also have many underlying features which can become more visible as users interact with them frequently. NFTs have the advantage of uniqueness, and adding endless routes for programmability could help in opening up many avenues for dynamic non-fungible tokens.
However, dynamic NFTs do not depend completely on the on-chain data. Oracles help dynamic NFTs in obtaining the off-chain data needed to make changes in the NFTs. Oracles also serve the necessary computing services required for dynamic NFT upgrades and modifications. Apart from bridging the gap between smart contracts and external web services, oracles help in making dynamics NFTs more decentralized and automated. Most important of all, oracles can ensure that dynamic NFTs are more connected with the real world.
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Benefits of Dynamic NFTs
The comparison between static NFTs and dynamic NFT art would show that dynamic NFTs are the next stage in the growth of NFTs. Dynamic NFTs could explore many other use cases in the future of blockchain and the decentralized web. The new type of NFTs combines the uniqueness of non-fungible tokens with the flexibility of adding dynamic data inputs. Is flexibility the only advantage you can find with dynamic NFTs? Here are some of the notable benefits you can explore with dynamic NFTs.
The biggest advantage of a dynamic NFT collection would refer to better engagement from users. Dynamic NFTs can help in tapping into the curiosity of users about the next changes in the collection or project. For example, new challenges and corresponding rewards, along with new methods for interacting with the collection, can fuel user engagement.
Dynamic non-fungible tokens can introduce the advantage of immersive experiences with NFT projects. Users would constantly look for new things to enjoy memorable and exciting experiences with dynamic NFTs, thereby encouraging them to spend more time with a specific solution.
The constant engagement of people with the content of dynamic NFT projects can help them find new ways to enjoy the collections. As a result, brands could leverage dynamic NFTs to transform their users into loyal fans. When more users engage with dynamic NFTs, they are more likely to spread word of mouth about the concerned project.
Successful engagement of more people with dynamic NFTs would also open up new possibilities for monetization of the dynamic NFT content. For example, DNFT collections can feature payments for exclusive premium content or rewards. Users who spend more time on the dynamic NFT site or app would more likely opt for the premium services and ensure better scope for monetization.
Above everything else, the most significant benefit of dynamic NFTs refers to the opportunity for innovation. Dynamic NFTs are flexible and offer the chance to come up with new strategies for creating and distributing content. At the same time, examples of dynamic NFT collection also exhibit the possibilities for tailoring the projects to drive engagement. Therefore, you have endless options for how you want to design dynamic NFTs with your innovative ideas.
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Examples of Dynamic NFTs
The discussion on basics in any dynamic NFT tutorial would also draw the limelight towards examples for dynamic NFTs. The examples could show you how DNFTs can serve promising value advantages to users. In addition, they can also highlight the favorable prospects for applications of dynamic NFTs in the future.
One of the most popular examples of dynamic NFTs refers to the LaMelo Ball NFTs. LaMelo Ball, a professional basketball player, has launched eight different dynamic NFTs, with each one maintaining records of his game stats. The LaMelo Ball NFTs change according to the updates in his game statistics, such as points scored, rebounds and assists. As one of the most renowned dynamic NFT examples, the LaMelo Ball NFTs reflect changes in the background color according to the players performance.
Interestingly, one of the dynamic NFTs from the collection featured a distinctive condition. The Gold Change NFT in the LaMelo Ball NFT collection stipulated changes in the NFT if the player won Rookie of the Year in the 2021 NBA season. As a matter of fact, LaMelo won the award, and the NFT transformed into a completely different image.
The example of the dynamic NFT collection of LaMelo Ball offers proof of how dynamic NFTs work and deliver benefits. On the one hand, they offer an immersive experience to followers of the athlete as they follow his sports career. At the same time, dynamic NFTs also offer the benefit of monetization to the athlete.
Popular Use Cases of Dynamic NFTs
The final highlight in the discussions on what is dynamic NFT would focus on their use cases. One of the most convenient use cases of dynamic NFTs would point at in-game avatars in progression-based games. The advantages of dynamic NFTs in other use cases, such as NFT sports cards and NFT real estate, could drive their adoption further. The LaMelo Ball NFTs are just the beginning of how athletes can use dynamic NFTs. For example, sports cards in the form of dynamic NFTs can help in tracing the players performance and offer engaging experiences to fans.
Another promising example of dynamic NFT use cases would refer to real estate. The tokenization of real estate has introduced many notable benefits, especially in terms of authenticating proof of ownership. However, static NFTs do not account for changes in the property details such as pricing and age. With the help of dynamic NFTs, real estate tokenization can make the most of precise updates in the details of properties. Dynamic NFTs can offer the flexibility for modifications or updates in the token metadata for a tokenized real-world asset.
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The detailed introduction to dynamic NFTs showcases them as a new generation of NFTs. You must notify the potential of dynamic NFTs to offer the advantage of unique ownership while responding to external conditions. The understanding of what is dynamic NFT and their working proves that smart contracts are the primary drivers of the functionalities of dynamic NFTs.
In addition, the popular examples of DNFTs show how they can contribute value in the real world. One of the most distinct highlights of dynamic NFTs refers to the facility of immersive experiences for users. Learn more about non-fungible tokens and how they can change the world.
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This article was originally reported on 101 Blockchains.