What are Dynamic NFTs aka dNFT?
Dynamic NFTs are a fundamental shift that needs to occur in NFTs to further mainstream adoption. NFTs (Non-Fungible Tokens) reached peak cultural adoption in December ’21 with celebrities, athletes, and fortune 500 companies all entering and testing the waters of the NFT space. For some, it worked, for others, it flopped, but no other use case of blockchain technology has brought more attention to the crypto space.
The bear market casts a harsh light on the NFT space. Projects that built on short tail functionality like hype started to shrivel from the plump grape they were into a dried-out raisin. In the bull cycle hype and “community” seemed to be the only ingredients you needed to have a successful mint. What happens after that “community” flipped out of the project at the top of the speculative hype bubble, and now you are left with a bunch of new members that bought into whatever you were selling, which was not much of anything.
Most of the utility in static PFP projects comes from off-chain activities like holder experiences such as private parties, conferences, and cross-branding deals. Feel free to sprinkle a little merch in there but is that a utility? Not really.
One of the more promising avenues for true on-chain utility was P2E (play-to-earn) gaming. Buy the static NFT, hold it, and pray one day you could use it as an avatar in-game. For the first time in your life as a gamer you could fully own your character. Who didn’t want to see that outcome become a reality? I know I did.
Sadly, the crypto space has the attention span of a pea. I am probably being generous with that statement. The realization that AAA games can’t be made in weeks, months, or quarters. They take years. WTF I am going to do with this jpeg in my wallet for years? I want to make money now. I have rent due in three weeks. Maybe I am over-dramatizing that last point but you catch my drift.
Dynamic NFTs can allow creators to focus on the long tail. What happens after the hype fades away, market value is established, and you want your holders to continue to hold? This is where dNFTs can truly provide unique utility to your collection.
Let’s start by defining what dNFTs are in their current iteration. A dynamic NFT is an NFT that can change based on external conditions. Through the use of smart contracts, the image and metadata of your NFT can be manipulated and changed as new events occur. It’s an incredibly exciting thing to think about. I’ve come up with three use cases.
Much like a traditional RPG where you have your base character, and as you progress through early to late game. You add stat points, upgrade your gear, learn new skills, etc. Now imagine all of that data passed to your NFT. That’s where the real magic happens. No longer do you have that static base avatar you minted three months ago. It’s evolved into the character you’ve created along the way.
That was a layup, I know, I know. How about something a little more niche? Fuck, ok.
Conferences, yep, you heard me, conferences. Imagine receiving an NFT as you scanned your conference ticket while walking into the convention center, but it was blank. The outrage! Bear with me for a second. The hosts could drive user behavior with dynamic NFTs by gamifying the experience. As we established earlier, event-based rewards can change metadata within the NFT. Completing missions like having 90 people attend the session on Metaverse Advertising would reveal a piece of the NFT or attend the Yuga Labs after party and get a unique BAYC/MAYC metadata trait.
I’ll give you one more, for the culture.
Storytelling, many communities have formed within the NFT space built on lore. It’s the main selling point to their community. Members all contribute their bits to the story of the collection providing depth to the static images in our wallets. Why do we watch tv shows? Generally, we get hooked on the storylines and character development until we are emotionally attached to the characters on screen and the potential outcomes of their choices. Imagine having dynamic NFTs that as the narrative of the story changed so did your NFT, or better yet, each major decision your NFT faces has consequences to your metadata or trait changes to the NFT. Wouldn’t you be waiting each week to see what happens next?
Now let’s look at how dynamic NFTs are starting to show up today. There is one project I’d like to focus on WZRDS. For those who don’t know, WZRDS built a negative reputation on Crypto Twitter for burning owners’ NFTs without the owner’s knowledge/consent. Many were quick to call the project a scam but let’s look at why this happened. Using a combination of storytelling and a burning mechanism WZRDS caught a few unsuspecting holders off guard.
The narrative as it goes pictures the medieval town of Tyrol struggling to keep up with the demands of life until one fateful day when two weary travelers stumbled upon a magical tome. The tome would unlock magic for the town of Tyrol. That quickly blossomed into the kingdom of Tyrol. Until one frightful day, a storm rolled in and turned the kingdom into ruin with the final strike of lightning casting down the Statue of the Almighty. Their mana that once filled their streets was sucked dry, and magic ceased to exist.
That’s some compelling stuff, am I right? But what does this have to do with burning NFTs…Just hold on a sec.
If you list your WZRDS NFT below a certain price you are labeled a coward. What significance does that have? Well, I am glad you asked. If you’re staking your WZRDS NFT, you can visit “the Altar ‘’ and pick a coward to have sacrificed. Sorry paper hands, now there are consequences for not doing your research. SHOCKING, I know. The idea can feel controversial, but only because it bucks our understanding of the existing norms.
For NFTs to fundamentally change the way we interact with contracts, receipts, collectibles, memorabilia, SaaS products, real estate, banking, legislation, and pretty much any other facet of your daily life that you can think of, we have to question existing models, iterate and think differently.
For example, every time Facebook makes a UI change to their site. It’s initially met with opposition because most of us fear change. Though as the sands of time pass away, so do all your gripes of what used to be. Heck, I struggle to remember what it used to look like.
The takeaway is that we must continue to stretch ourselves outside of what feels comfortable to seek progress. Copypasta of what worked previously isn’t innovation. Challenging what worked with new ideas and concepts will inevitably lead us to the end goal of mainstream adoption. We need to welcome change, even embrace it, because we aren’t where we need to be, and that’s where we are all headed.
What do you think of dynamic NFTs? Have we seen their final iteration? Where do you see NFTs 5 years from now? Let me know in the comments.
Next steps
Check out Beyond Rarity
Feel like a pro-level trader without all the training and know in seconds what is over/underpriced. Command your trading with our all-in-one dashboard, featuring real-time price estimation and rankings. Be the first to get access to the beta at bynd.pro/medium
Some interesting articles I think you’ll enjoy
Our Top 12 NFT Tools
Why We are More Bullish than Ever on NFTs
NFT Winter is Heating Up
Sign up for email updates
By signing up here, you’ll stay in the know of all things Beyond Rarity and future article releases.
