Dynamic NFTs or dNFTs, the new evolution of non-fungible tokens that promise to transform over time and not remain static assets.
NFTs, one of the most developed blockchain technologies in the crypto ecosystem, brings a new innovation and evolution that are the dNFTs or Dynamics NFTs. The objective of this new concept is to allow NFTs to stop being static and immovable elements so that they can evolve and transform over time, i.e. access to obtain new properties depending on the programming of the tokens and their possible subsequent existence.
The dNFTs basically allow the creation of a new type of asset on a blockchain, which will be able to alter its properties as time goes by and the actions performed by its holders. Consequently, this new way of creating NFTs will give the opportunity to open new possibilities for this technology, which is evolving every day in a satisfactory way for the whole ecosystem.
Metadata, a key tool for dNFTs
For dNFTs to function properly, the development of smart contracts and the processing of metadata are crucial for them to evolve.
Metadata pose great challenges and privacy issues, but the reality is that the blockchain itself and now, dNFTs offer the solution, since, it will be possible to decide whether or not to keep the evolution of non-fungible tokens.
If maintained, all information and metadata will be encrypted and accessible only to the hodler of that NFT, while for the rest of the world, the metadata is unreadable and only the evolution of the NFT can be viewed.
While dNFTs are not that different from the NFTs we already know, they will be much better than what is offered by centralized companies like Google or Meta, which when it comes to managing our metadata on the network have suffered theft and questions about leaks and sales of the same.
The project ChainLink has been one of the first to offer tools for the development of such tokens with their existing decentralized oracle infrastructure. In their latest “Virtual Hackathon Workshop” they have presented in code form how “Dynamic NFTs” can be created and executed. In addition, it is worth adding that ChainLink has the ability to process all that information securely, just as the huge amount of data serving their blockchain oracles does.
Utility in games based on blockchain technology
In the development of blockchain games such as Axie Infinity, Axies evolve in a linear way and according to what users can give them. If dNFTs were implemented, it could be possible that in addition to this game dynamic, Axies could evolve based on battles against other Axies and the characteristics they possess.
Consequently, Axies can create a new dynamic ‘battle experience’, which reacts dynamically and uniquely to each battle in which they compete. In this way, new experiences and abilities could be offered that are not directly related to the predetermined evolution or the Axies’ owners impose on them.
Finally, dNFTs are able to change the dynamics of games and make them more interesting, since they create new mechanisms and randomness of evolution and playability to the project.
Utility in Real Estate
In the Real Estate industry, NFTs already represent properties, but with dNFTs they can change to show the evolution of the property over a given period of time. Also, you can visualize the structural or infrastructure changes of the property and how it may change over time (example in the image). Finally, you will also be able to see the modifications and price changes for different reasons.
Copyright or IP is a niche where clearly this new technology of dynamic NFTs can also be used. A clear example is that if a country makes a copyright registration for a book, this could be stored in the form of a NFT so that it is easily visible and verifiable worldwide. As copyrights expire in some cases, the dNFT will be able to show the validity of the copyright until it expires.
In this example case, the NFT will automatically change to ‘open access work’ and become free of copyright. Currently, this process is highly bureaucratic, inefficient and with many gray areas. Thanks to blockchain technology and dNFTs, this type of operations can achieve a radical change in terms of copyright possibilities.
Both traditional NFTs and, in this case, dNFTs have been on the market for a short time and their developments still have room for improvement and highly effective proposals for the different ecosystems in which this technology can be used, which undoubtedly still has a lot of potential to be exploited and to know exactly in which niche to be used.
If we look at industries such as cryptocurrencies, which at first were speculative and over time became real and reliable, to the point of being used in many countries as payment methods.
With NFTs and their derivatives (in this example dNFTs) we are still navigating a sea of infinite possibilities for their uses. The imagination and implementation of these new emerging technologies are at the disposal of the companies and communities that develop solutions around them and in time can establish themselves as truly usable assets that have an ultimate goal for the experience and benefits of digital (or real) users.
Written by Rodrigo Catalan (TW: @RodrigoCatalanB) for NFT Express.