A LOOK INTO WHAT DYNAMIC NFTs (dNFT) ARE AND THEIR UTILITIES
As always said in the crypto and financial market spaces, "the trend is a trader's friend". One would say that this trend of NFTs would be credited to the metaverse and the application of NFTs as veritable digital assets for digital existence in a digital World. Also the utilities of digital collectibles for games and content creations made the concept gain momentum in the crypto space. Dynamic NFTs are the new trend in the NFT world. They are an improvement over static NFTs because they are more flexible and expand the possible use cases of NFTs. In this article, we would look into what dynamic NFTs are, how they work, examples and some use cases.
WHAT IS AN NFT?
It is of utmost importance that we move from simple to complex as one needs to explain sexuality before reproduction. So, NFT is a short form for Non Fungible Token, as we can see, fungibility is the ability for something to be replaced by another identical item, just like you can replace $10 with $5 and $5. Non fungibility means the state of uniqueness, no one thing can replace the other. Linking this back to tokens, our cryptos like BTC, ETH, APT are fungible tokens because 1BTC = 1BTC. In the opposite direction Non fungible tokens are unique digital assets represented on a blockchain. Every NFT is unique and features a distinct contract address alongside a token ID.
Some may think about NFTs as something new but do you know that NFTs have been around since 2014, NFTs are gaining momentum now because they are becoming an increasingly popular way to buy and sell digital artwork. The market for NFTs was worth a staggering $41 billion in 2021 alone, an amount that is approaching the total value of the entire global fine art market.
Just like other evolution in technology, NFT is not left behind, we have seen fractionalized NFTs and now we are embracing the opportunities ushered in NFT space with dynamic NFTs (dNFT).
WHAT ARE DYNAMIC NFTs?
We have seen what NFTs are, now we look at why you clicked on this article. What are dynamic NFTs and their uses?, you are asking. As the name implies "DYNAMIC" you can as well be thinking of "CHANGING" . You are not far from the truth. Dynamic NFTs are NFTs that change based on external data sources. One of the first NFTs to change its state was created by digital artist Mike Winkelmann, aka Beeple. That was in 2020, ahead of the U.S. Presidential election, Beeple created the NFT artwork Crossroad, which changed its appearance based on the outcome of that contest. So, if the former president, Donald Trump, pipped Joe Biden at the ballot box, Beeple could flip a switch and have the NFT display an animation of a bloated Trump corpse rotting in a park. And if Trump secured a second term, the NFT would permanently show a clip of Trump running through a hellscape, Godzilla-style.
Of course, Biden beat The Donald, something reflected in the current state of Beeple’s NFT. But Beeple sold his NFT before that happened; his pitch to buyers was that although they had no idea which NFT they would eventually buy, it would codify a piece of history forever more. One buyer was clearly inspired; after Beeple initially sold Crossroad for $66,000, it was subsequently resold for a then-record-breaking $6.6million
A dynamic NFT is a non-fungible token that can change based on certain circumstances as programmed. At this point one would say that we have static NFTs. Static NFTs are basically NFTs that don't change, they are digital assets with permanent token data. They are the opposite of dynamic NFT that changes.
With dynamic NFTs you can achieve flexibility and with static NFTs you can achieve security and trust, though at the expense of flexibility.
HOW DYNAMIC NFTs WORK
With not much Ado, let's look at how the dynamic NFTs work. The core element underlying the functions of dynamic NFTs is Smart contract. In order to guarantee changes in dynamic NFTs through both on-chain and off-chain computation, smart contracts are essential. The smart contracts would assess the on-chain and off-chain data upon receiving a request for a dynamic NFT to decide the response. As a result, the circumstances specified in the smart contract determine how dynamic NFTs change. Hope we are grasping the concept here. Look at the diagram below.
- A request is first initiated to a smart contract for an NFT.
- The request is received by the smart contract for processing.
- The smart contract makes a call for on-chain data and processes the results.
- The contract uses an oracle to make a call for off-chain data and processes the results.
- Both the off-chain and on-chain data are evaluated. Then, the smart contract returns media one or two to the requestor.
From the above, we buttress the point that Smart contract is the core determinant of dynamic NFTs. In essence, this means that smart contracts are what enable NFTs to evolve, update, and grow over time based on off-chain and on-chain data.
It is also Important to note the functionality of oracles in dynamic NFTs. Oracles help dynamic NFTs in obtaining the off-chain data needed to make changes in the NFTs. Oracles also serve the necessary computing services required for dynamic NFT upgrades and modifications. Apart from bridging the gap between smart contracts and external web services, oracles help in making dynamic NFTs more decentralized and automated.
Let's look at some examples of dynamic NFTs to consolidate our knowledge. As we mentioned earlier with Beeples 2020 USA dynamic NFT, there is a great example of dynamic NFTs which is the popular "LaMelo Ball NFTs", LaMelo Ball is a professional basketball player who launched eight different dynamic NFTs, with each maintaining records of his game statistics meaning that these changes based on the updates in his game statistics, such as points scored, rebounds and assists.
There is a particular dynamic NFTs, Gold Evolve NFT in the LaMelo Ball NFT collection which stipulated changes in the NFT if the player won Rookie of the Year in the 2021 NBA season. LaMelo won this award, and the NFT changed completely into a different image.
A recent great example of dynamic NFTs can be found as dynamic Crypto Dad NFT offered to her OG holders
UTILITIES OF DYNAMIC NFTS
With the examples stated above, we know how dynamic NFTs could be used. Let see other places where dynamic NFTs could be utilized.
- The most popular and easy to grab concept of the utility of dynamic NFTs would be in sports. NFT sports cards could drive adoption further. Currently, the sports World is now dominated with statistics since early 2006 and this would help bring engaging experience to fans. The LaMelo Ball NFTs are just the beginning of how athletes can use dynamic NFTs. For example, sports cards in the form of dynamic NFTs can help in tracing the player’s performance( when they score, injured, win individual awards or trophies) and offer engaging experiences to fans.
- Another case where metadata changes are useful is in the tokenization of real-world assets, where a host of changing metrics are often required. The tokenization of real estate has introduced many notable benefits, especially in terms of authenticating proof of ownership.For example, a dynamic NFT representing a property could reflect its maintenance history, age, market value, and more. Tokenizing these changing assets therefore requires NFTs which have the ability to update with changing metadata. This changing data is made possible with smart contracts execution of the off-chain activities of the said asset.
- One of the most convenient use cases of dynamic NFTs would point at in-game avatars in progression-based games. In a dNFT, these traits change based on external conditions. This functionality can be useful for character progression, a core tenet of many different game models in blockchain games. When first starting a game with a playable dNFT character, the dNFT has base stats reflected in its metadata. As the player continues leveling up, the metadata in the dNFT changes to reflect the character’s growth.
NFTs on Aptos
Aptos is a layer 1 network designed to be scalable, safe and fast by processing all transactions simultaneously after which they are validated. This is possible because of its parallel execution engine, Block-STM, which also makes it a low transaction cost blockchain.Aptos is constructed with Move, a Rust-based programming language. Its distinctive attributes include a parallel execution engine, high-level security characteristics, and low transaction fees.
The ability to support NFT minting is one of the aspects the Aptos blockchain wishes to enhance on existing Layer 1s.The primary reason the Aptos blockchain works so well with NFTs is due to its parallel execution engine. Users' ability to finance new accounts and make NFTs for their accounts is greatly improved. Before sending contracts to the network, it is straightforward to assess them natively using Aptos' command line interface tools. Furthermore, writing scripts for NFT minting is made easier by Aptos' TypeScript SDK.
All of this enables a single user to produce many NFTs simultaneously across several platforms. Instead of using a lot of resources to generate NFTs one at a time, users can use several instances at once to establish a cycle of transactions. The dev-net can produce enormous numbers of NFTs in less than an hour, according to testing.
Aptos mainnet was launched on October 12th, 2022 and the concept of dynamic NFTs is brewing in the ecosystem. With the lastest partnership with NPIXEL. Aptos and NPIXEL are joining forces to create METAPIXEL, a Web3 gaming ecosystem. This partnership sees NPIXEL creating games on the Aptos network. We may likely see the concept of dNFT on the in-game assets of NPIXEL games on Aptos.
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