Guide to Dynamic NFTs
You might not have heard of dynamic NFTs, but it’s ok — soon all NFTs will be dynamic.
Currently, only a few people know what a dynamic NFT is. However, there will be no such word in the next bull market, as the majority of NFTs will be dynamic. Dynamic NFTs offer something that people will want to get involved with, as there is unlimited potential. But let's start from the beginning.
✦ NFTs 101
As you probably know, an NFT is a digital item stored on the blockchain. They all have unique contract addresses and ID codes, and, because of the use of blockchain, a clear trail of ownership. Data can be attached, for example, images, videos, audio, etc.
Smart contracts are programs stored on the blockchain. They make sure certain outcomes occur if events happen; so, if X takes place, then effect Y will appear. For example, in games, an NFT can be awarded to a player based on the smart contract for reaching some achievement.
NFT metadata is a collective term for graphical assets and text traits. When it comes to the standard NFT, this data is fixed and frozen, and while an NFT may be a video, once created, it is in its final form.
Static NFTs cannot engage or react to any external factors: they simply exist.
✦ What is a dynamic NFT?
With dynamic NFTs, there are two aspects of metadata — the visuals, and the written data, the same as regular NFTs. But, inputs can constantly change the metadata. Dynamic NFTs have more utility since they can respond to user interaction with the tokens, which unlocks potentially limitless utility.
In other words, dynamic NFTs, unlike static ones, are responsive and interactive. So for example, if the NFT is sold, the appearance of the NFT can change. The factors determining the change to the images can be anything in the online or real world, and they can be relatively predictable or completely algorithmically generated, depending on the creator's intentions.
To summarize the difference, typical static NFTs have unchanging metadata, but dynamic NFTs can constantly grow and change. They are the next step in NFTs.
✦ What are the possible implementations of this technology?
Dynamic NFTs can constantly change, stay up to date, and provide a reason for users to want to keep them, collaborate on them, and acquire them. Here are six areas dynamic NFTs can be applied:
❶ NFT tickets. As their metadata can change in response to what people do and how they interact with the ticketed event, dynamic NFT tickets unlock limitless possibilities to integrate quests, challenges, and tasks. This can make the whole experience more interactive, invite people to take an active part in the event, and have their achievements reflected in a rare NFT that evolved like no other. Such an exclusive NFT could become a token of loyalty and commitment to their favorite artist or athlete and give the NFT holders exclusive benefits.
❷ Move-to-earn apps. Dynamic NFTs will help create an active and engaged community, by rewarding the most engaged users with bonuses and exclusive benefits. For example, sneakers can change color and increase in rarity after a person walks 1k/10k/20k miles. The same technology will also help with partnering with health, lifestyle, and sports brands’ communities.
❸ Wallets. Virtual behaviors can affect users’ avatars. This way, they have a reason to keep hold of the NFT and engage with the virtual space. For example, with Zerion DNA, users have ‘living NFTs’ for exploring web3. DNA responds to the user's balance, the amount spent on gas fees, and the networks used, so they constantly change.
❹ Games. In-game conditions can reflect real-world weather, avatars can change based on experience, weapons can glow based on enchantment, trees could grow based on the rate of ETH, and when an NFT is burned the sky could change color. These are just some of the many potential uses for gaming.
❺ Art. Dynamic NFTs offer a completely new artistic method, where the pieces never stay the same and are a collective effort. Our OG Crystals are an example of dynamic NFTs in this vein. They changed with each transaction, based upon the users' wallet history and other factors. This meant that the owners became co-creators of these artistic pieces.
❻ Documentation. For example, to demonstrate ownership and proof of change. Imagine if a deed to a house was a dynamic NFT. With each change to the house, for example, renovations, new rooms, improved heating, etc. the deed can reflect them, and the value can constantly update. Nothing can be hidden, and document ownership can be traced on the blockchain.
There are plenty of other potential uses, and we will see them become embedded in the web3 world and because of their potential, they will become the norm.
✦ Why are dynamic NFTs the future?
Dynamic NFTs, unlike static ones, have several advantages. This is why they will become standard, and provide a real future for NFT technology.
☻ Dynamic NFTs boost engagement. Because they are constantly growing and changing, users will have a real incentive to engage, co-create and own them.
☻ Dynamic NFTs are collaborative. Communities come together to determine what variables should be baked into the smart contracts so that they can react to what they want them to.
☻ There is a constant relevance to dynamic NFTs. By being able to respond to pretty much any online or IRL factor, they stay up to date.
☻ Dynamic NFTs secure a floor. People always want to buy something new, therefore there will be real value to the ever-changing dynamic NFTs. But, those who hold them have many reasons to keep them, so they maintain a floor to their value.
OG Protocol is a software that powers dynamic NFTs, and we’re happy to discuss the dynamic NFT logic that you have in mind, or just talk about the future of web3.
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