What are Dynamic NFTs?

 Have you heard about NFTs? Of course, you have, and you’re probably fed up with all these countless articles about NFTs. But there is a topic that is still covered very little. While most of you have already a basic understanding of the nature of NFTs, very few would know the difference between static and dynamic NFTs.

Static, dynamic? Well, yeah, this is a relatively new thing. The boom around million-dollar sale NFTs may fade away slowly, but there is a new thing coming. Dynamic NFTs. And they can completely change what we’ve known so far about NFTs.

But what are they? And how are they different from the NFTs we know? 

Table of Contents

Quick Explanation of NFTs

  As you may know, NFTs stand for non-fungible tokens and there are different types of them. Recently there was a new addition in a form of soulbound tokens. They are not similar to digital currencies, and they are not denominated.

NFTs, unlike bitcoin or any other currency, are unique. Each NFT has a unique id and it can’t be replaced with other NFTs.

These days NFTs are mostly associated with digital art that artists create using NFT art software programs. True, NFTs make it possible to actually sell digital art by providing proof of ownership.

But, in fact, NFTs are more than just proof of ownership for digital art. NFTs can be game items, domain names, metaverse assets like LANDs, etc.

Static vs Dynamic NFTs

In all these NFTs you’ve seen so far, all the news about groundbreaking sales is about static NFTs. As its name suggests, static NFTs are those that don’t change. But it doesn’t refer to only static images. Static NFTs can be videos, animated mages, GIFs and any other NFTs.

The thing is NFTs are disconnected from the external world. Once it is minted, the NFT can’t be altered. It’s not a bad thing, this limitation exists because of the security measures of the blockchain system. To keep the blockchain safe, it is disconnected from the external world. Due to this safe environment of blockchain, NFTs can’t interact with external data.

Dynamic NFTs were created to solve that limitation. A dynamic NFT’s traits and data can change through an outside influence.

For example in an online game, you may have game characters that you want to upgrade to increase their value and win the battles. And that could be possible only through dynamic NFTs.

Or, let’s take another example. An NFT trading card for a soccer player can reflect the scores of that player. If it’s a static NFT, it would reflect the scores of a single season or for a limited period. If the player wins again, your NFT won’t show it. But if it’s a dynamic NFT, the stats can be updated. So whenever the player plays the game and scores, the NFT will be updated according to the recent data.

How it Became Possible to Make NFTs Dynamic

As mentioned above, it was a security measure that didn’t allow the blockchain to connect with the external world. But how did it become possible? Well, it’s all because of oracles. Oracle is a third-party data feed or entity that allows blockchain to use external data or systems. So NFTs can use oracles to change their data based on new information from external systems.

Though, a single oracle can put the blockchain at risk, as the whole point of blockchain is in it being decentralized. That’s why developers use chainlink, which is a network of decentralized oracles to avoid that risk.

Oracles also solve another big problem of NFTs, and that’s the rarity. Some NFTs like trading cards or game assets get their value from their rarity. Everyone in a game has the chance to find a unique item, but only a few lucky ones actually get it. And that the random possibility of finding the item is one of the key elements to creating value.

This process of assigning unique attributes to NFTs relies on random number generation (RNG). However, blockchain cannot guarantee the proof of randomness for NFTs. Blockchain miners can manipulate the minting process and get “rare” NFTs.

Thankfully, oracles can solve this problem. They use complex math functions that can’t be manipulated by miners or centralized operators and generate fully verifiable random numbers. So NFT owners and creators can rest easy thanks to the fair process of minting NFTs on the NFT marketplaces.

What About Collectibles?

Above, we mostly talked about NFT gaming, and not without reason. In-game NFTs need to be interactive so that players can upgrade their items, improve game characters and play with more fun and income.

But what about art? The idea of collecting art is based on the non-changing nature of art. What’s the point of buying a cat image NFT if someone can change the image to a dog picture? Well, in that sense creators and buyers would prefer static NFTs. And I also thought there was no point in making art NFTs dynamic.

Or at least, I thought so until I came across a very interesting NFT project that I want to share with you to show that dynamic NFTs can perfectly apply to art as well.

OG:Crystals is a project allowing NFT owners to grow crystals. It all starts with crystal seeds. After 5 days of owning it, the seed grows into a crystalline/coral reef. When you sell the NFT, it will grow a new coral structure based on the new owner’s wallet history. Every time it’s passed to a new wallet, the crystal changes

The more the crystal is sold, the more unique it is. It represents the history of each owner and encourages collectors to continue trading these NFTs. This is a great example of dynamic NFT that has all the chances to become a very rare collectible for art collectors.

Final Words

NFTs are still living their early days and gradually improving. Dynamic NFTs are just the next step to more complex and maybe more useful NFTs.

But keep in mind that NFTs will still have many major changes, and who knows what NFTs would look like in the future. One can only wait and see.

Copyright © 2022 FutureVorld