September 7, 2022
3 min read

Dynamic NFTs: Everything you need to know

NFTs seem to be constantly evolving, ushering the next phase of development: Dynamic NFTs. The capacity of dynamic NFTs to update their metadata can spice up the creator game.

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Vicky Petrova

NFTs (non-fungible tokens) swiftly emerged as a very promising aspect for building Web3. High-profile public figures have been involved in NFT projects and collections as these tokens gain popularity. They are also very appealing for having a wide range of applications and use cases. NFTs seem to be constantly evolving, ushering the next phase of development: Dynamic NFTs. 


The capacity of dynamic NFTs to update their metadata can spice up the creator game. It’s totally feasible to update the records with ongoing sales and maintenance if a dynamic NFT represents a piece of property. Real estate is just one possible application for dynamic NFTs and it seems the potential for dynamic NFTs is virtually unlimited.  


What are Dynamic NFTs


We must first get our heads around the fundamentals of Dynamic NFTs to completely understand their significance. Let's begin by defining NFTs (in case you are still not sure what they refer to). Blockchain-based, non-fungible tokens (NFTs) are entirely distinct digital assets. Each NFT keeps track of a unique token ID and contract address. A token's metadata can also have files, photos, links, data, and other things attached to it. 


NFTs can also represent distinct things in both the real and virtual worlds. The metadata and token ID of a non-fungible token are fixed once it has been minted, making these tokens static. The dynamic aspect can be viewed as a characteristic that gives NFTs the capacity to adapt and react to outside circumstances. 


Take a progression-based game where NFTs serve as avatars. These avatars could display a variety of skills, such as those that are encoded in the information of the token, such as strength, agility, and quickness. NFTs must update certain aspects of the token as players advance in the game so it accurately represents their efforts. Dynamic NFTs include a unique identification but also have the ability to update and change metadata depending on external circumstances. 


Static vs dynamic NFTs 


The next stage in the development of non-fungible tokens has begun with dynamic NFTs (dNFTs). Most NFTs have been static up until this point, employed mostly as digital collectibles, in NFT art projects, and in play-to-earn game ventures.  


After being issued on a blockchain, the metadata of the static NFTs is fixed. This restricts their application to tasks like tokenizing physical assets, developing progression-based video games, or setting up fantasy sports leagues on the blockchain. The metadata has to be updated for each of these. This is where dNFTs come into play because they can alter depending on outside factors. 


As the NFT industry matures, dynamic NFTs represent actual technological development. Dynamic NFTs are here to fundamentally change the NFT industry. Most of the NFTs you may have traded, or seen are "static" NFTs with locked (or "frozen"), IPFS-stored metadata that cannot be changed. The execution of smart contracts is required by the ERC-721 token standard for Ethereum, which also defines static NFTs. Contrarily, the more modern ERC-1155 standard specifies a dynamic NFT, which allows metadata to be updated in reaction to external factors. 



How dynamic NFTs work


Smart contracts, which enable the use of both off-chain and on-chain calculations, enable the expansion of dynamic NFTs. Smart contracts leverage both on-chain and off-chain data to determine what to tell users when they request NFT-embedded data.  


  • First, a smart contract receives an NFT request. 
  • The smart contract searches the blockchain for data. 
  • The agreement requests information from an oracle that is not stored on the blockchain. 
  • After that, the smart contract returns one or two pieces of media. 


In other words, smart contracts enable the gradual modification of NFTs.  

To determine whether a non-fungible token should change and, if it should, smart contracts leverage both off-chain and on-chain data, depending on the use-case. 


Real estate dynamic NFTs 

Dynamic NFTs are becoming increasingly popular in this industry. Consider a home that has been in the family for several generations. Now it has been tokenized as a dNFT and is on the market with the holder also being the owner of the original title deed. Over time, renovations, upgrades, and maintenance are carried out, changing the property's worth. The dynamic NFTs' metadata will immediately reflect these changes that correspond to the outside world backed, for example, with a series of renovation pictures or videos. 

NFT Sports dynamic NFTs 

Sports memorabilia, such as sports cards, are yet another wonderful example. Let's now take a look at a hypothetical dynamic NFT that features a real-world football player. The player's speed, body type, height, number of goals and shots, and other variations can all be included in the NFT's metadata. The information that the player is logging will undoubtedly alter throughout each season. With dynamic NFTs, the metadata for this information is automatically updated. 


Gaming dynamic NFTs 

A dynamic NFT functionality allows for authentic verification and guarantees the volatility of in-game item distribution. As a result, when participating in campaigns and events in the game, P2E players will benefit from a fair and random allocation of rare assets and power rankings. 


Passports as dynamic NFTs

Governments may theoretically issue dynamic NFT passports that would continuously update the information on the traveler. No stamp or further papers will be required because the data is stored on the blockchain. This would lessen the likelihood of fraud once they are immutable and verifiable.


Manufacturing dynamic NFTs

Businesses like Apple, Samsung, Ray-Ban, Adidas, Nike, Sony, and others are likely to be attracted to dynamic NFTs because their products are routinely duplicated and sold to consumers worldwide as fakes. Due to the integration of verified authenticity within the NFT and the blockchain's ledger, piracy and product counterfeiting may see considerable declines in the following years. At the very least, it will be much harder for manufacturers of fake goods to implement the strategy. 


Dynamic NFT art


Dynamic NFTs have the potential to advance NFT art. Crystal Reef is a dynamic NFT that has grown as a result of transactions over time. The developers planned for crystals to develop their characteristics and change how they looked over three months. The creators intend to produce actual crystal duplicates and put them on exhibit in museums. They can also be utilized in augmented reality. 


Play-to-earn with dynamic NFTs 


Dynamic NFTs can significantly impact P2E games. Using the Chainlink Verifiable Randomness Function (VFR). The rarity of the aforementioned factor is determined by the random distribution of traits and in-game goods permitted by VFR. Since VFR is verified, no one can influence the randomness in their favor and the outcomes are verifiable on the blockchain. For instance, Dream Quest, a P2E game based on NFTs, uses VFR to guarantee the fair and random distribution of attributes to its NFTs.



While still in its early days, the NFT craze might be just the right choice your brand makes right now. Relite aims to empower businesses via NFTs, a $300B market, by opening the funnel for NFT mainstream adoption. We help retail brands like yours implement a custom-tailored NFT strategy that will keep you on the edge of competition.


Want to sell NFTs on your website? The Relite creative team is here to assist! If you are not sure where to start but you want to innovate, contact us today to discuss the best NFT strategy, specially tailored for you.

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