What Is a Dynamic NFT?

2022-05-27, 11:21

1. dNFTs differ from static NFTs as they can communicate outside the blockchain

2. Wide applications of dNFTs can be found in sports, healthcare, gaming, etc.

3. An important technology for the future of blockchain.

NFTs have constantly remained in the spotlight over the last few years. Their popularity continues to grow as more and more celebrities and big names join the bandwagon. Along with this, new and exciting use cases for NFTs are being found and developed over time. Now, these tokens have become more mainstream and are not just exclusive to Web3 communities.

The simple definition of an NFT (Non-Fungible Token) is that of a digital asset that is stored on a blockchain. This can be in the form of any artwork, music, or piece of writing. The defining attribute of an NFT is its immutability. These tokens are digitally unique and each NFT has an owner with a public record of that ownership that can be easily verified.

Enter the Dynamic NFT

The NFTs that we commonly hear about are static NFTs. These NFTs are implemented using blockchains. This decentralized environment grants them attributes like immutability and provides them security but there are certain drawbacks also. Being a part of a specific blockchain only allows them to interact within the blockchain ecosystem and does not allow access outside of the blockchain. Meanwhile, dynamic NFTs (dNFTs) solve this issue by means of ‘Oracles’ that allow the NFT to interact with the outside world. Oracles can be defined as data feeds from external data sources that empower smart contracts to interact with systems outside the blockchain. This allows the dynamic NFT to adapt and change due to external data and events.

Source: https://opensea.io/collection/moody-ghost

Applications of Dynamic NFTs

As we have already established, dynamic NFTs can change according to external events as opposed to static NFTs. This allows them to upgrade their stats or visual appearance. Consider a sports NFT of an athlete. Based on the real-life performance of the athlete, the attributes of the player can be upgraded or downgraded. The design of the NFT can also be upgraded to add a trophy or medal that the athlete won in a recent tournament. Similarly, the dNFT of a Formula 1 race driver can be upgraded based on his race wins. This concept can be applied to any sport or competitive event.

Source: https://opensea.io/collection/formulagp

Dynamic NFTs are not just limited to sports. Consider a dNFT of a house. It can store all the maintenance history of the actual house and be modified in case any new renovation or modification is done to the real building. Similarly, dNFTs can also be used in the healthcare domain to store patient records that can be updated with each appointment or change in the health condition of the person.

Future of dNFTs

Dynamic NFTs are certainly the future of NFT technology. Their ability to evolve based on real-life events makes them more useful and practical in a wide variety of domains. The authenticity of a dNFT is also enhanced as a result. It’s not hard to imagine a future where you would be able to travel freely using a dNFT as a passport that gets updated automatically as you travel to a new destination. This would not only remove the need for unnecessary paperwork and stamps but also offer a more seamless travel experience.

Similarly, dNFTs have the ability to reduce frauds and scams as the dNFT’s code is secure and ownership is clearly defined in a public ledger. The future prospects of dNFTs are exciting and will certainly help boost the adoption of blockchain technology. Gamers will also get an enhanced experience by owning dNFTs. Dynamic NFTs will certainly prove to be a prominent part of Web3 and the Metaverse.

Author: Gate.io Researcher: Chuk. U
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