What is a dynamic NFT (dNFT) and how does it change over time?

• A dynamic NFT (dNFT) is an NFT that has code in its smart contract. This code allows the NFT's information to change based on things that happen outside of it.

• Unlike static NFTs, dNFTs may update aspects of their metadata, providing a distinctive feature for digitizing items in the real world.

• The change in a dNFT often refers to modifications in the NFT’s metadata triggered by a smart contract.

A dynamic NFT (dNFT) is a Non-Fungible Token (NFT) with encoded smart contract logic that enables it to potentially change its metadata based on external conditions.

NFTs are unique digital objects that exist on a blockchain, they are different from each other because of a unique ID and contract address.

Metadata such as images, video files, or other data can be attached to these tokens, making it possible to own a token that represents a unique digital object.

Static NFTs are the most common type of NFT right now. They are mainly used for art and for things you can collect in play-to-earn games. However, the metadata attached to static NFTs is fixed once they’re minted on a blockchain, limiting their use cases.

Dynamic NFTs, on the other hand, keeps its unique ID, but it can also update some of its information. This means a dynamic NFT may change based on external conditions, often referring to modifications in the NFT’s metadata triggered by a smart contract.

Creating a dynamic NFT requires an NFT smart contract built on the ERC-721 or ERC-1155 token standard, or an alternative standard on another blockchain that works similarly.

It also needs the ability to connect to external data, often through a blockchain oracle service, and the ability to automatically trigger NFT metadata changes based on predefined conditions.

By combining these core elements together, developers may build dynamic NFTs that can be modified in multiple ways based on external conditions.

Dynamic NFTs provide a distinctive feature for digitizing items in the real world, such as real estate deeds, patents, and other unique identifiers. They may also be used in building progression-based video games or creating blockchain-based fantasy sports leagues that often require data to be updated.

For example, dynamic NFTs may be minted based on certain conditions, such as when a hidden spot is found in an augmented reality application. They can also house “hidden traits” manifested through user interactions instead of within the metadata.

As the NFT space continues to evolve, dynamic NFTs are expected to contribute to the future of digital assets. The potential of dynamic NFTs to adapt and change in response to external events and data expands the design space that NFTs can address.

This shows that there are new ways for people to make things personal, interactive, and valuable in the digital creator economy