What are dynamic NFTs and how do they change?

2023-11-18 22:41 Update

Summary

Under the general category of non-fungible tokens (NFT), there is also a subcategory called dynamic NFT. Due to the use of smart contracts and the casting conditions set by the creator, the dynamic NFT series can change, so it is essentially different from the static NFT.

Introduction

NFT is unique and irreplaceable on the blockchain Cryptocurrency assets. These unique assets are typically minted according to guidelines (aka token standards), so each NFT has a unique token ID.

In addition to cryptocurrency collectibles and NFT art, static NFTs can also digitize real-world assets such as passports, certificates, and real estate deeds. Although these experimental use cases have been implemented, NFT cannot fully represent real-world assets carrying non-static information.

When minting static NFTs with smart contracts, permanent and immutable token data is used. In other words, the data of static NFT cannot be changed. Therefore, static NFTs remain unchanged regardless of changes in external circumstances. Due to this limitation, static NFTs will become outdated after the information changes.

Dynamic NFT does not have this limitation. Although their token ID remains the same, dynamic NFTs have the unique ability to change when certain conditions are met.

What is dynamic NFT?

Dynamic NFT is a subclass of NFT that can be changed when certain conditions are met. Each NFT contains information called metadata, which is data that describes the characteristics of the NFT.

Metadata can include names, descriptions, and even unique characteristics of the NFT. For example, a gaming NFT’s metadata could include characteristics of the avatar (such as strength or stamina). For NFT art, metadata can include the color or accessories of the artwork.

You must have heard of the Ethereum game Cryptocat. It is one of the first NFT projects and quickly became popular after its debut in 2017. In the blockchain game Mystery Cat, players can become virtual cats to collect, breed and trade dynamic NFTs.

Unlike static NFT, the metadata of dynamic NFT can be changed and can be visually transformed. The reason is that static NFTs are usually minted using the ERC-721 token standard, while dynamic NFTs are designed using the ERC-1155 token standard.

According to Ethereum, tokens minted using the latter standard are the same as fungible ERC-20 tokens and Non-fungible ERC-721 tokens have similar characteristics. So technically speaking, ERC-1155 tokens are semi-fungible and can be changed if necessary.

How to change dynamic NFT?

The specific method is usually as follows:

Dynamic NFTs are minted through smart contracts using metadata.
Smart contracts obtain data from oracles. Oracles are actually third-party services that provide external information through data sources such as Internet of Things (IoT) data and network application programming interfaces (APIs).
The smart contract then evaluates the NFT using the data obtained from the oracle to evaluate the NFT and encode changes during the minting process.
Then update the characteristics of the dynamic NFT if necessary.

Application of dynamic NFT

Identity

If blockchain-based identity becomes a reality, dynamic NFTs could be used to characterize digital identities or passports globally . Thanks to this flexibility of dynamic NFTs, digital identities can be automatically updated without having to replace digital identity documents. Details including place of residence, marital status and contact information are updated automatically.

Game

ERC-1155 token The standard is primarily used in NFT games, so it’s no surprise that dynamic NFTs are most common in blockchain games. Players can use dynamic NFT upgrade avatars to represent their characters in the game, thereby enhancing the gaming experience. As players gain experience, their character growth can be reflected through the changing appearance or statistics of NFT avatars.

The concept of game progress is an important part of game design to attract players, and dynamic NFT can successfully attract players. Dynamic NFTs also facilitate self-selected game endings and enhance other engaging experiences that require external data to obtain.

Virtual real estate

While real estate tokenization has been around for some time, static NFTs cannot reflect changing factors such as property price, age, and ownership. Dynamic NFTs can capture real estate details and have the flexibility needed to update specific information.

Art

Japan The traditional aesthetic art form Wabi-sabi focuses on capturing beautiful moments rather than eternity. It perfectly explains the desire of people around the world not to miss beautiful moments. With dynamic NFTs, digital artists can encode changes to their artwork with real-time data, recording these changes to make their artwork more unique. This is the case, for example, with dynamic NFT artwork that changes appearance depending on the current weather or season.

NFT art can also be improved by imitating art installations in the real world that require audience participation to appreciate. In this case, the dynamic NFT may change as the token holder interacts with the asset, which is equivalent to viewing a digital art exhibition in advance.

Conclusion

Compared with static NFT, dynamic NFT is more intelligent and can Adapt and reflect conditions in the outside world in real time. In addition to the applications mentioned in this article, there are many use cases for dynamic NFTs, countless of which can easily meet the changing needs of NFTs.