DNFT technology creates subscription services that are secure, verifiable and immutable.
Over the past decade, the subscription model has experienced significant growth, and the trend shows no signs of slowing down. 70% of business leaders say subscription business models will be the key to their business prospects in the years ahead.
Entertainment and software are the most common subscription products; however, everything from property to digital art can be sold through subscriptions.
Since Dynamic NFTs can be upgraded or altered, the technology is perfectly positioned to create subscription services that are secure, verifiable and immutable.
This article will discuss ways DNFTs can be used as a subscription model.
Ethereum Name Service
Ethereum Name Service (ENS) is a naming system built on the Ethereum blockchain. It allows users to have a readable name in place of their wallet address, similar to a domain name on the internet.
ENS is currently a hot topic of discussion in the Ethereum community. Debates are ongoing on the ownership and hoarding of ENS. Vitalik Buterin, creator of Ethereum, and many others argue that hoarding ENS prevents large brands from entering the space; they propose ENS holders should pay an annual subscription fee to keep the name.
Although ENS is not the main focus of DNFTs, the ENS hoarding narrative has pushed the idea of an update to the Ethereum network (EIP 5643), which would see a subscription model for NFTs implemented in the network.
Many industry experts speculate it is only a matter of time before properties are tokenised and sold as NFTs. Static NFTs are sufficient for property transactions as sales are one-time arrangements.
However, property leasing usually requires contract amendments, which would be impossible with static NFTs. A new NFT contract would have to be created for each revision, which would be costly and time-consuming.
Conversely, Dynamic NFT metadata can be altered to input contract amendments, making DNFT technology ideal for mid to long-term property leasing contracts.
NFT creators often grant token holders exclusive access to in-person or digital events and other perks. Some musicians and artists offer their NFT holders access to unreleased music or art.
However, the capabilities of reward systems are limited to static NFTs. Traditional NFTs are limited to the tokens' original metadata.
In comparison, DNFTs offer advantages such as:
❶ Create and update reward systems post-mint.
❷ Update the NFT with exclusive rewards.
Creators could randomly airdrop NFT upgrades to holders.
Reward systems would incentivise people to hold the DNFT and increase users' willingness to pay a subscription fee.
Comparatively, static NFT creators are less likely to add future value to the NFT collections, meaning users would be less willing to pay subscription fees.
Software as a Service
Software as a Service is an emerging industry, with many programs having the potential to be tokenised and sold through subscription models.
Some key benefits of SaaS on blockchain include:
❶ Immutable and verifiable ownership.
❷ Easy to transfer ownership of software between wallets.
❸ Crossborder payments.
❹ Scalable blockchain solutions to assist developers in growing their service.
Offering SaaS on the blockchain in the form of DNFTs resolves many of the problems currently faced in the industry, such as high cross-border payment fees and scalability issues.
NFT digital art creators could incentivise holders to pay a recurring subscription by upgrading the art over time. Holders would benefit from more engaging digital art. Also, creators would benefit from recurring income, which could help fund future growth.
For most static NFT projects, the hype eventually dies down, and the creators and investors move on to the next project - this creates a profit-taking culture for many investors.
On the contrary, DNFTs can provide holders with ongoing additional value. Hence, communities are more likely to stay invested (which increases the likelihood of long-term success for a project.)
As with many emerging technologies, many potential use cases of DNFTs are yet to be discovered. But one thing we are sure of, DNFTs are about to revolutionise industries beyond the current blockchain technologies.