NFTs are a type of crypto asset that are unique and can't be duplicated on the blockchain. These one-of-a-kind assets are created using a token standard that gives each NFT a unique token ID.
NFTs have many potential use cases, including digitizing real-world assets like passports, certificates, and property deeds. However, these use cases may not be suitable for assets that require dynamic information that may change over time.
Static NFTs are created using smart contracts and have permanent, immutable token data. This means that the information associated with the NFT cannot be changed, even if circumstances change. This makes static NFTs vulnerable to becoming outdated.
Dynamic NFTs, on the other hand, offer a solution to this limitation. These NFTs have the ability to change their information under certain conditions, while still retaining their unique token ID.
Dynamic NFTs
Dynamic NFTs are a unique type of NFTs with the ability to have their characteristics altered under certain conditions. NFTs consist of information called metadata, which describes their features and characteristics, such as the traits of an avatar or the colors and accessories of a piece of NFT art.
One of the first NFT projects to gain widespread popularity was CryptoKitties, an Ethereum-based blockchain game where players can collect, breed, and trade dynamic NFTs in the form of virtual cats. Unlike static NFTs, dynamic NFTs can have their metadata modified and visually updated.
Dynamic NFTs are designed using the ERC-1155 token standard, while static NFTs are created using the ERC-721 token standard. The ERC-1155 token standard allows for tokens to possess both the features of fungible ERC-20 tokens and non-fungible ERC-721 tokens, making them semi-fungible and able to be changed if necessary.
Overall, they offer more flexibility and versatility than static NFTs and are becoming increasingly popular in the world of NFTs and blockchain-based gaming.
How Do Dynamic NFTs Change?
Dynamic NFTs operate in the following manner:
- A dynamic NFT is created by a smart contract with a pre-defined set of metadata
- The smart contract acquires information from oracles. Oracles are third-party services that provide data from external sources, including the Internet of Things (IoT) and web application programming interfaces (APIs)
- The smart contract then assesses the NFT by utilizing the data from oracles, allowing for encoding of changes during the minting process
- The dynamic NFT's characteristics can then be updated as needed, reflecting the new information
Some Uses For Dynamic NFTs
Identity
Dynamic NFTs have the potential to revolutionize the way digital identities are managed. With the advancements in blockchain technology, it is possible that dynamic NFTs could be used as digital identity cards or passports in the near future.
These NFTs are highly flexible, which means that the information they contain can be updated automatically without the need for a replacement. For instance, changes to personal details such as place of residence, marital status, or contact information could be reflected in real-time.
The adoption of dynamic NFTs as a means of representing digital identity would greatly enhance the speed and efficiency of updating and managing personal information. It would also make it easier for individuals to keep their digital identities up-to-date and secure.
Gaming
Dynamic NFTs are widely used in blockchain-based gaming, and for good reason. Allowing for changes in NFT characteristics makes it ideal for use in games. For instance players can level up their in-game characters and have their progress reflected in the NFT avatars.
The ability of dynamic NFTs to change their characteristics opens up new possibilities in game design. For example, players can have a more immersive experience by having their NFT avatars change appearance or stats as they progress through the game. Additionally, dynamic NFTs can be used in choose-your-own-ending games and other participatory experiences that require external data to work, making for even more exciting gaming experiences.
Virtual Real Estate
Static NFTs have limitations when it comes to the tokenization of real estate, as they cannot account for changes in property details such as price, age, and ownership. Dynamic NFTs, however, have the capability to accurately reflect these nuances and can be updated to reflect changes in real-time, making them a more suitable option for the tokenization of real estate.
Art
The appreciation of art that is fleeting and transitory, as seen in the traditional Japanese aesthetic art form of wabi-sabi, is widespread. Dynamic NFTs allow digital artists to encode changes in their artwork using real-time data, creating a sense of impermanence and making their pieces even more unique. For example, there are dynamic NFT artworks that change based on current weather or season conditions.
They also provide a way for NFT art to mimic real-world art installations that require audience participation. In these cases, the NFT can change based on the holder's interaction with it, thus increasing engagement at digital art exhibitions. This interaction with the NFT allows for a unique and personalized experience for each individual.
A Smarter NFT
Dynamic NFTs offer greater versatility and intelligence compared to static NFTs. They have the ability to respond to real-time data and reflect changes from the external environment. This feature opens up a wide range of possibilities for utilizing dynamic NFTs, as they can easily adapt to meet the changing demands of various applications. The potential for dynamic NFTs is nearly limitless, making them a valuable asset in the NFT landscape.
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