Dynamic non-fungible tokens (NFTs), which can evolve thanks to smart contracts and the conditions encoded by their creators, constitute a sub-category of NFTs. Unlike conventional or static NFTs, dynamic NFTs can adapt to information from the outside world and reflect it in real time, offering unprecedented flexibility.
Dynamic NFT: an evolution of static NFT
Static NFTs, created using the ERC-721 token standard, are issued with permanent, immutable token data. The metadata of these unique assets cannot be modified, which can render them obsolete if information changes. In contrast, dynamic NFTs, designed using the ERC-1155 standard, are capable of evolving under certain conditions.
How do dynamic NFTs work?
Dynamic NFTs contain information called metadata, which describes their characteristics. This metadata can be modified and translated visually. The smart contract evaluates the NFT using data obtained from oracles, and encodes changes during the issue process. The characteristics of the dynamic NFT are then updated as necessary.
Dynamic NFT applications
Dynamic NFTs have many applications in different fields, including:
Virtual real estate: dynamic NFTs can reflect changing factors, such as property prices, age and ownership. They have the flexibility needed for specific information updates.
Identity management: dynamic NFTs could be used to represent identity cards or digital passports worldwide. The flexibility of these NFTs would enable changes to be updated automatically, without the need to replace digital identity documents.
Art: digital artists can use real-time data to encode changes in their artwork to convey impermanence, making their works more unique.
Video games: gamers can evolve their avatars by using dynamic NFTs to represent their in-game characters, enhancing the gaming experience. Dynamic NFTs could also facilitate “choose your ending” games and other participatory experiences that require external data to function.
Dynamic NFTs: a “smarter” class of NFTs
Dynamic NFTs are a “smarter” class of NFT than their static counterparts, as they can adapt to information from the outside world and reflect it in real time. With their unique flexibility, dynamic NFTs open up new application possibilities, which can easily meet NFT modification needs.