Dynamic non-fungible tokens (dNFTs) offer a high level of customization and have the ability to evolve over time based on particular events. What are the possible use cases and are they more interesting than static NFTs?
First of all, what is a static NFT?
First, it is necessary to briefly discuss static non-fungible tokens (NFTs). These are non-fungible tokens cannot be changed once they have been issued. As soon as a static NFT is minted, its metadata is frozen on the blockchain.
To date, they are the most widespread NFTs and are mainly used for artistic projects, blockchain games or any other project that does not plan to interact with third-party data.
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What is a dynamic NFT?
Dynamic NFTs (dNFTs) are a special type of non-fungible token that can evolve over time. They can be programmed to evolve, interact with other NFTs or external data sources.
There are many potential uses for dynamic NFTs, and their capabilities are limited only by the imagination of their creators. Here are some examples of possible uses for dNFTs.
A digital artwork that changes appearance depending on the time of day or weather. For example, such a dynamic NFT could be a digital painting that displays different colors or patterns depending on the temperature or humidity of a given locality.
Dynamic NFTs could represent objects in games or metaverses that evolve or change over time based on player actions or interactions. For example, a dynamic NFT can represent a rare item in a game that becomes more powerful or more valuable as the player progresses through the game. It can also represent a virtual character and all of their gear and attributes and gear. which evolve according to the actions of the player.
Figure 1: A dynamic NFT can evolve to reflect player progress
The NFTs representing music or video content may be updated with new versions or corrections. For example, a dynamic NFT might represent a music album that automatically adds new tracks as they are released, or a video series that adds new episodes over time.
digital real estate
Virtual real estate whose value changes based on the performance of the underlying asset. For example, a dynamic NFT could represent a virtual property that increases in value based on the popularity of a particular location or its neighbors.
Figure 2: The metadata of a dNFT representing a property may change to reflect past sales, works, etc.
The representation of real objects
The NFTs representing physical objects, such as works of art or collectibles, could change appearance based on events or external triggerss. For example, a dynamic NFT which would represent a painting which would come to be restored in the real world could evolve according to the state of the work.
The Importance of Oracles for Dynamic NFTs
Oracles are third-party data structures that provide external data to smart contracts on a blockchain. Thus, they can be used to connect smart contracts to real-world events, but also other blockchains.
Thereby, dynamic NFTs use oracles to integrate external data and interact with the real world in various ways. For example, for a dynamic NFT to evolve according to the meteorological data of a precise locality, it will have to resort to an oracle.
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Are dynamic NFTs more interesting than static NFTs?
Dynamic and static NFTs have their own advantages and disadvantages. For creators, the best choice will therefore depend on their needs and preferences.
Dynamic NFTs offer more interactive and creative possibilities. This can add an extra degree of engagement and make them seem more “lively”. However, dynamic NFTs can also be more complex and require more maintenance or programming from their creator, as they need to be updated and monitored to make sure they work properly.
Static NFTs, on the other hand, are easier for creators to set up. They are more stable and predictable, and this feature may be more appealing to some. Moreover, not all NFT projects necessarily require the use of dynamic componentswhich are more complex to develop and require high knowledge in blockchain programming.
Ultimately, when the creator has to choose between dynamic and static NFTs, this will mostly depend on personal preference and the specific use case envisioned. Both types of NFT have their own strengths and can be useful in different situations.
Conclusion on dynamic NFTs
Generally, dynamic NFTs offer a high level of interactivity and creativity to creators and collectors of digital goodsand they have the potential to revolutionize the way we think about ownership and value in the digital world.
Dynamic NFTs are still in their infancy and the turnkey solutions made available to creators have not yet been fully developed. This dynamic aspect is crucial for the development of NFTs and offers a very high degree of customization.
However, dynamic NFTs will not replace static NFTs. The two types of non-fungible tokens are made to coexist and each meet specific needs.
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