Summary
Branching out from the broader category of non-fungible tokens (NFTs) is a subcategory called dynamic NFTs. NFT tokens are fundamentally different from their static NFT token counterparts because they can evolve, thanks to smart contracts and terms encoded by their creators.
the introduction
NFT tokens are unique digital assets that are non-fungible on blockchains. These one-of-a-kind assets are typically created using specific guidelines, also known as a token standard, that ensure each NFT carries a unique token identifier.
Aside from digital collectibles and NFT token art, NFT tokens can be used to digitize real-world assets such as passports, certificates, and real estate deeds. However, experimental use cases for NFT tokens — while a reality — may not be able to fully represent real-world assets that carry unstable information.
When smart contracts create immutable NFT tokens, these assets are minted with immutable, immutable token data—in other words, this data cannot be changed. Therefore, regardless of external conditions, NFT tokens remain unchanged and thus become obsolete if the information changes.
However, dynamic NFT tokens can address this limitation. While NFT token identifiers remain the same, dynamic NFT tokens have the unique ability to change under certain circumstances.
What are dynamic NFT tokens?
Dynamic NFT tokens are a subcategory of NFT tokens whose properties can change when certain conditions are met. Each NFT token contains information called metadata, as its name defines its characteristics.
Metadata can include NFT token names, descriptions, and even specific features. For example, metadata for NFT games can include avatar attributes, such as strength or stamina. For NFT art, this can include the colors of the artwork or its accessories.
You may have heard about the Ethereum-based game CryptoKitties, one of the first NFT projects that has quickly gained popularity since its debut in 2017. CryptoKitties is a blockchain game where players can collect, raise, and exchange dynamic NFT tokens in the form of virtual cats.
Unlike static NFTs, dynamic metadata for NFTs can be changed and transformed visually. This is because while static NFTs are typically created using the ERC-721 token standard, dynamic NFTs are built using the ERC-1155 token standard.
According to the Ethereum network, tokens created using the ERC-1155 standard carry features similar to fungible ERC-20 tokens and non-fungible ERC-721 tokens. Therefore, tokens that fall under the ERC-1155 standard are technically semi-fungible and can be changed if necessary.
How can dynamic NFT tokens be changed?
Here's how to do it.
A dynamic NFT token is minted through a smart contract with a set of metadata.
The smart contract gets data from middlewares (oracles), which are services that provide external information from data sources, such as IoT data and web application programming interfaces (APIs).
The NFT token is then evaluated by the smart contract using data obtained from the middleware to evaluate the NFT tokens and cryptographic changes during the minting process.
The properties of the dynamic NFT tokens will then be updated as necessary.
Uses of dynamic NFT tokens
Identity
If identity on the blockchain becomes a reality, dynamic NFT tokens may actually be used to represent digital ID cards or passports around the world. The flexibility of these codes will allow changes to be updated automatically without the need to replace digital identity documents. This can include details such as place of residence, marital status and contact details.
the games
The ERC-1155 token standard is mainly used in NFT games, so it is no surprise that dynamic NFT tokens are commonly found in blockchain games. Players can enhance their avatars with dynamic NFT tokens to represent their in-game characters, thus enhancing the gaming experience. As players gain more experience, the evolution of their in-game characters can be reflected in the changing appearances of NFT tokens.
The concept of progression in games is key to game design to engage players, and NFTs facilitate this. Dynamic NFT tokens could also facilitate end-choice games and other participatory experiences that require external data to function.
Virtual real estate
While real estate tokenization has been available for some time, static NFT tokens are unable to reflect changing factors, such as property prices, age, and ownership. Dynamic NFT tokens, on the other hand, can capture the finer details of real estate and have the flexibility to update specific information.
Arts
As evidenced by the traditional Japanese aesthetic art form wabi-sabi that emphasizes transience rather than continuity, ephemeral and transitional art is widely appreciated throughout the world. Thanks to dynamic NFT tokens, digital artists can use real-time data to encode changes in their artwork to convey this changing nature, making their art pieces even more unique. For example, there are dynamic NFT artworks that change appearances based on the current weather or season.
NFT art can also be elevated by mimicking real-life art installations that require audience participation to be appreciated. In this case, the dynamic NFT token can change depending on the token holder's interaction with the asset, thus promoting participation in digital art galleries.
Concluding thoughts
Dynamic NFT tokens are a class of NFT tokens that are “smarter” than static ones, as they can adapt to and reflect information from the outside world in real time. In addition to the uses mentioned in this article, there are countless use cases for dynamic NFT tokens, which can easily satisfy the need to change an NFT token.
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