What are Dynamic NFTs?

Non-Fungible Tokens (NFTs) have completely changed how digital assets are bought, sold, and traded. For the uninitiated — a non-fungible token (NFT) is a one-of-a-kind digital token used to represent ownership of a digital asset on the blockchain. NFTs allow producers to earn money from their digital works and buyers to acquire digital assets with verifiable proof of ownership and authenticity.

One type of NFT that has recently gained significant attention is the dynamic NFT. Dynamic NFTs are unique digital tokens that go beyond traditional NFTs by incorporating dynamic and interactive elements into the digital asset they represent. These dynamic elements can change over time, making dynamic NFTs more versatile and engaging than static NFTs.

What are dynamic NFTs?

Dynamic NFTs incorporate dynamic and interactive elements into the digital asset they represent. They are created using smart contracts, which contain code that defines the behaviour and characteristics of the NFT.

Dynamic NFTs can be programmed with various attributes that can change based on certain conditions or triggers.

For example, the value of a dynamic NFT could be linked to real-world data, such as the price of a cryptocurrency or the weather, and automatically adjust based on these changes. Dynamic NFTs can also have interactive elements, allowing users to interact with the digital asset differently, such as changing its appearance, behaviour, or functionality.

The ability of dynamic NFTs to change and evolve makes them more versatile and engaging than static NFTs. This feature is achieved by embedding specific rules and conditions within the smart contract, which dictate how the NFT will behave and what changes can be made.

Once these rules and conditions are met, the NFT can change automatically, providing a unique and personalised user experience.

How do they work?

Dynamic NFTs differ from traditional ones in that the artist can define rules that determine how they evolve. This is made possible through the use of smart contracts that automate certain functions, such as changing the appearance, animations or behaviour of the NFT depending on specific circumstances.

Dynamic NFTs use the ERC-1155 token standard, allowing for data storage in an edited format, making them “semi-fungible.” Oracles are used to modify dynamic NFTs by sending external data to the smart contract, causing the NFT’s metadata to change.

Smart contracts also define how the dynamic NFTs can be bought, sold or traded and how royalties should be distributed to their creators. To interact with dynamic NFTs, users need a crypto wallet that supports smart contracts. They can collect, sell or trade NFTs on NFT marketplaces or use them in decentralised applications that utilise NFTs’ dynamic features.

How are they different from static NFTs?

Static NFTs represent a fixed digital asset that does not change over time. Once created, the digital asset associated with a static NFT remains unchanged throughout its lifecycle. On the other hand, dynamic NFTs can change and evolve based on predefined conditions or user interactions, making them more adaptable and versatile.

Dynamic NFTs provide more interactivity and engagement compared to static NFTs. They can respond to external triggers, adapt to changing conditions, and offer unique user experiences that evolve. Dynamic NFTs blur the line between digital and physical assets, opening up new possibilities for creators and buyers alike.

Use cases

1. Gaming: Dynamic NFTs can create unique and interactive gaming experiences. Foresay, a dynamic NFT, could represent a game character that evolves and gains new abilities based on the player’s progress or achievements.
2. Art: Dynamic NFTs can create digital artworks that change or evolve. Foresay, a dynamic NFT, could represent a digital artwork that changes colours based on the time of day or the weather.
3. Collectables: Dynamic NFTs can be used to create rare and unique items that change in value over time. For example, a dynamic NFT representing a rare baseball card could increase in value based on the player’s performance or popularity.
4. Music: Dynamic NFTs can be used harmoniously to create unique and interactive experiences for fans. For example, a dynamic NFT representing a music album could have additional tracks or features unlocked based on the user’s engagement with the music.
5. Real estate: Dynamic NFTs can represent properties with changing values based on various factors, such as market conditions or property improvements.

Examples

1. “Asteroids” by Polyient Games: “Asteroids” is a dynamic NFT-based game that allows players to own and customise their spaceships. The game features various asteroids that provide resources and upgrades, and the value of the asteroids changes based on the game’s real-time data.
2. “Art Blocks” by Snowfro: “Art Blocks” is a platform that allows artists to create dynamic NFT-based generative art. The art pieces are made using algorithms that can generate unique variations of the artwork each time they are viewed.
3. “CryptoKitties” by Dapper Labs: “CryptoKitties” is a dynamic NFT-based game that allows players to own and breed digital cats. The cats’ various attributes and characteristics can affect their value, which changes based on supply and demand.
4. “NBA Top Shot” by Dapper Labs: “NBA Top Shot” is a dynamic NFT-based platform allowing users to purchase, trade, and sell officially licensed NBA collectables. The collectables represent moments from NBA games, and their value changes based on various factors such as player performance and popularity.
5. “Rarible” by Rarible Inc: “Rarible” is a dynamic NFT-based marketplace that allows users to buy, sell, and trade various NFTs. The platform features a variety of dynamic NFTs, including art, music, and gaming-related NFTs.

Conclusion

Dynamic NFTs are a new and innovative addition to the world of NFTs, providing unique and interactive experiences for users. They can change and evolve, making them valuable in various industries, such as gaming, art, collectables, and music. With the potential to create personalised and engaging experiences, dynamic NFTs are expected to continue to grow in popularity and provide new opportunities for creators and buyers alike.

If you are interested in further exploring dynamic NFTs and the world of blockchain-based assets, you may want to consider checking out Giottus. This cryptocurrency exchange offers a range of NFTs for buying, selling, and trading. Sign up for a Giottus account today and start exploring the exciting world of NFTs!

Disclaimer: Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions.