Dynamic NFTs, also known as “smart NFTs”, are non-fungible tokens that can change over time. They are similar to traditional NFTs in that they represent unique digital assets, but they also contain a set of rules or conditions that determine how the asset can be modified.
Dynamic NFTs are often used to create interactive experiences or games that involve the ownership and transfer of digital assets. For example, a dynamic NFT could represent a collectible card that has different abilities or powers depending on the actions taken by the owner. The rules of the game or the smart contract associated with the NFT would determine how the card’s abilities change over time.
The idea they hide is to allow NFTs to stop being static and immovable elements to be able to evolve and transform over time. That is, they can acquire new properties based on the programming that made their existence possible and underlies them.
What are Dynamic NFTs (dNFTs)
Basically, dNFTs create a new type of asset on the blockchain, which is capable of altering its properties as time passes and the actions of its holders accumulate in its history, becoming a reflection of the history and experience of each holder. dNFTs radically change the NFT ecosystem and open the door to new possibilities for this technology.
Features of Dynamic NFTs
Some of the features that are often associated with dynamic NFTs include:
- Changeable attributes: The attributes of a dynamic NFT can change over time, based on the rules or conditions specified in the smart contract. For example, a dynamic NFT might represent a collectible card that gains new abilities or powers as it is used in a game.
- Ownership transfer: Dynamic NFTs can be bought, sold, and traded like traditional NFTs. The rules of the smart contract determine how ownership is transferred and what happens to the NFT’s attributes when it changes hands.
- Interactivity: Dynamic NFTs can be designed to be interactive, allowing the owner to take certain actions that affect the NFT’s attributes or behavior. For example, a dynamic NFT might represent a virtual pet that can be fed, trained, and played with by the owner.
- Programmability: Because dynamic NFTs are created using smart contracts, they can be programmed to perform a wide variety of tasks. This can include things like sending notifications, making payments or interacting with other smart contracts.
- Security: Dynamic NFTs are stored on the blockchain, which provides a high level of security and ensures that they cannot be counterfeited or modified without the permission of the owner.
Metadata is the key
To achieve this operation, dNFTs make use of smart contracts and the processing of metadata associated with them, in order to evolve. Although the use of metadata poses great challenges and privacy problems, the reality is that the blockchain itself and dNFTs offer the solution, since it is possible to decide whether to maintain or close the evolution of NFT. In the case of keeping it, all information and metadata is encrypted and accessible only to the host of said NFT. For the rest of the world, the metadata is unreadable and they can only see the evolution of the NFT.
Of course, it is not a perfect solution, but it is much better than what centralized companies (such as Google or Meta) offer when it comes to managing our metadata on the network. Beyond this, dNFTs are not that different from the NFTs we already know.
In fact, platforms like ChainLink offer tools for the development of this type of token with its current infrastructure of decentralized oracles. It should not be forgotten that ChainLink has the capacity to process all this information securely, just as it does with the enormous amount of data that it serves to its blockchain oracles.
Utility in blockchain games
What use can dNFTs have? In game development blockchain is one of them. For example, in games like Axie Infinity, the Axies rule is that they evolve linearly and according to the additions that their users are capable of giving them. But with the use of the DNFTs, it would be possible that in addition to this game dynamic, the Axies could evolve based on the battles with other Axies and the characteristics they possess.
In this way, the Axies can create a new dynamic “battle experience”, reacting dynamically and uniquely to each battle they engage in. Offering them access to new experiences and abilities over time that are not directly related to the evolution that their holder imposes on them. Thus, dNFTs are capable of changing the dynamics of games and making them more proactive and random, injecting new evolution and gameplay mechanisms into them.
The real state, where the NFTs that represent a property can change to show the evolution of the property during a certain period of time, is one of them. Thus, if the property is issued as an NFT at a certain time, but undergoes changes over time, this NFT will change to show those changes and continue to represent the property as it is in reality.
Another use can be in the issuance of copyrights or IP for developments of all kinds. For example, if a country copyrights a book, it could be stored in the form of NFTs so that it is easily verifiable globally. Since the copyright expires in a certain period of time, the NFT will show the validity of the copyright until its expiration.
In the end, the NFT will automatically change to “Free Access Work” and will be free of the rights that protected its author. Currently, this is a highly bureaucratic, inefficient process with so many gray areas. Therefore, transforming this sector with blockchain technology and facilitating this type of operation would be a radical change in terms of the possibilities it can offer.
Constantly improving technology
Undoubtedly, the NFTs and their brothers, the dNFTs, have a lot of room for improvement in their proposals. As in the entire blockchain ecosystem, the technology that is presented is immature and to a certain extent experimental on many occasions. This allows innovation to be rapid, but it also means that the ideal niche for them is not exactly known.
For example, cryptocurrencies were seen more as a curiosity than as a real payment method, but time has given its verdict. In the case of NFTs and dNFTs, we are just navigating a sea of endless possibilities. As businesses and communities build solutions around them, these technologies will take hold and become the center of our digital experience in the future.