Dynamic NFTs: All You Need To Know

In the NFT and blockchain scene, there seems to be innovation and novelty at every turn. One example of this innovation is Dynamic NFTs, a type of blockchain-based digital asset that can change or evolve over time and offer unique benefits to both creators and collectors.

Unlike traditional NFTs, which are static and unchanging, dynamic NFTs can update their content, change their appearance or interact with other smart contracts, opening up a wide range of possibilities for creative expression and functionality. In other words, they are NFTs that come to life.

In this post, we will take a closer look at what dynamic NFTs are and how projects are using them today.

Static vs Dynamic

A static NFT, such as a one-of-a-kind cryptoart piece or a digital collectible like a Bored Ape PFP, remains unchanged from the moment you acquire it and will not change in the future. When it is sold to a new owner, the visuals and metadata remain the same.

Dynamic NFTs, on the other hand, have the capacity to change and evolve over time, responding to data, events or other NFTs to create something new or unique.

Dynamic NFTs typically undergo changes in their metadata triggered by a smart contract. Such changes are encoded in the NFT Smart Contract, which instructs the underlying NFT when and how to automatically change its metadata.

Dynamic changes to NFT metadata can be triggered based on a variety of external conditions, including both on and off-chain factors. However, due to the inherent limitations of blockchains, it can be challenging to access off-chain data and computation necessary for these changes.

To overcome these limitations, some third-party services such as Chainlink offer off-chain data and computation capabilities that can trigger dynamic NFT updates. This helps bridge the gap between the blockchain world and the real world and allows for more engaging and decentralized processes to be built.

Examples

An example of a dynamic NFT is a digital artwork that changes its appearance depending on certain conditions, such as the weather or the time of day. Another example comes from the field of web3 gaming where non-fungible characters can advance through levels, gain strength or learn new skills. Another example is a music NFT that updates its content with new tracks or remixes as they are released by the artist.

Let us now analyze some concrete projects and creators that have implemented Dynamic NFTs:

Image: Beeple

1. Digital artist Mike Winkelmann, also known as Beeple, was among the pioneers of NFTs, which could change over time. At the end of 2020, shortly before the US presidential election, Beeple created the NFT artwork Crossroad, which would change its appearance depending on the outcome of the election.

Had former President Donald Trump won the election against Joe Biden, Beeple could have altered the NFT to show an animation of a decomposing Trump corpse in a park. In the event of a second Trump term, the NFT would permanently show a clip of Trump running Godzilla-style through a post-apocalyptic landscape.

As history would have it, Biden emerged victorious, and Beeples' NFT reflects that. However, he had already sold the NFT before the result. He marketed it as a unique collector's item that would capture a moment in history forever. One buyer found this idea inspiring, as the Crossroad NFT sold for $66,000 and was later resold for the then-record price of $6.6 million.

2. Zerion DNA or Dynamic NFT Avatar is a revolutionary "living NFT" that dynamically changes with your Web3 activities. Your DNA continuously evolves as you are active in the wallet, updating your on-chain identity across six different attributes: background, filling, body, clothing, head, and color. The colour attribute in particular adapts to reflect the network with the highest balance in your Zerion Wallet, allowing you to demonstrate your financial dominance.

The avatar changes colors to reflect the network with the highest balance in your Zerion Wallet - This one represents the dominance of the Optimism network‍

3. Over the past year, notable athletes such as NBA sensation LaMelo Ball have been driving the development of innovative Dynamic NFTs that use Chainlink Sports data feeds to redefine the dynamic between players and fans.

4. The LaMelo Ball NFT collection includes eight different NFTs, each representing a unique set of the player's statistics, ranging from rebounds and assists to points scored. NFT owners have exclusive access to raffles and other NFT-specific incentives based on LaMelo's performance.

5. One of these eight NFTs, the Gold Evolve NFT, included a special promise: if LaMelo Ball was named Rookie of the Year in the 2021 NBA season, the NFT would transform itself to present a new image. After LaMelo's victory, the NFT was transformed.

6. The LaMelo Ball NFTs serve as an excellent example of dNFTs that continually change based on external data. In this case, LaMelo's player stats are regularly updated on the blockchain within the NFT, resulting in display upgrades, rewards and more.

7. Regenerative Resources (RRC) is a company specialising in ecosystem services with the aim of transforming barren land into thriving seawater environments.

8. RRC recently announced its intention to launch a series of dynamic short film NFTs created by renowned artists. The proceeds will be earmarked for the seeding and maintenance of 100 million mangroves as part of RRC's ongoing initiatives.

9. Initially, each short film NFT will contain only one image. However, as NFTs are purchased or resold, more images will gradually be unlocked until the NFT holder can see the complete short film in an ongoing process.

10. The Organic Growth Crystal Reef is made up of dynamic NFTs that are constantly evolving based on transactional activity. Whenever OG:Crystal was transferred to a new owner, its original crystalline form remained unchanged but was transformed by the addition of a new, personalized, and unique crystal structure influenced by the characteristics of the new collector's wallet.

11. As stated by the developers, the crystals evolve their properties and change their appearance over a period of 3 months depending on time and transaction activity. The crystals are suitable for use in augmented reality and the developers plan to create physical replicas for display in museums.

Potential Implications

1. Dynamic NFTs have the potential to revolutionize the way we think about ownership, value and authenticity in the digital world. Because they allow for constant updates and changes, they can provide a more exciting and immersive experience for collectors and allow creators to market their works in new and innovative ways. They also provide more flexibility and control over digital assets, enable more efficient and secure transactions, and reduce the risk of fraud or counterfeiting.
2. Imagine a future where passports are no longer physical documents, but dynamic NFTs. Governments could issue these NFTs, which are automatically updated with a person's travel information, eliminating the need for stamps or additional paperwork.
3. Since all data is securely stored on the blockchain, the risk of fraudulent activity is greatly reduced. These passports would be immutable and verifiable, so they cannot be changed or manipulated. In this scenario, the possession and use of passports would be a streamlined, secure and convenient process. People would be able to travel with ease, knowing that their information is always up to date and secure.
4. Overall, dynamic NFTs represent an exciting and rapidly evolving field with enormous potential for creativity, innovation and new forms of value creation. Whether you are a collector, artist or technologist, it is worth paying attention to this field and exploring the many opportunities and possibilities it offers.

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